page_title: Central bank
section_title: Policy instruments
hierarchical_section_title: Central bank / Policy instruments
context_page_description: A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a state or formal monetary union,
  and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in a financial crisis. Most central banks also have supervisory and regulatory powers to ensure the stability of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member banks.
  Central banks in most developed nations are institutionally independent from political interference. Still, limited control by the executive and legislative bodies exists.
context_section_description: The main monetary policy instruments available to central banks are open market operation, bank reserve requirement, interest rate policy, re-lending and re-discount (including using the term repurchase market), and credit policy (often coordinated with trade policy). While capital adequacy is important, it is defined and regulated by the Bank for International Settlements, and central banks in practice generally do not apply stricter rules.
caption: The Bank of Japan, in Tokyo, established in 1882.
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