This material is copyrighted. Free, unrestricted use is allowed on a non commercial basis. The author's name and the address of this website must be incorporated in any reproduction of the material for any use and by any means. But things have changed since. Central banks today are the most important feature of the financial systems of most countries of the world.
Central banks are a bizarre hybrids.
Some of their functions are identical to the functions of regular, commercial banks. Other functions are unique to the central bank. On certain functions it has an absolute legal monopoly. The Central Bank invests the foreign exchange reserves of the country while trying to maintain an investment portfolio similar to the trade composition of its client - the state. The Central bank also holds onto the gold reserves of the country.