Talk:Central bank

message: I would like to see a clarification about using Central Bank money to pay countries obligations.
For example in Argentina the government is using part of the reserves to pay part of the country debt (formally I think this must be approved by the congress). How is the situation in other countries?  —Preceding unsigned comment added by 190.16.236.74 (talk) 05:00, 14 October 2008 (UTC)
thread_title: Use of Central Bank money to pay Country obligations

message: *State Bank of Pakistan (the name could implify state ownership)
*Central Bank of Syria ("The Central Bank of Syria is an independent public sector establishment operating under the guarantee of the state , and within the guidelines issued to it by the Council of Ministers . The Capital of the bank is fully subscribed by the state.")
According to this, a good thumb rule seems to be that those counties treatened or blockaded by the U.S. have fully state owned central bank, except in Norway.
Any thoughts or opinions on this?
:Only these: that in those cases where the bank does operate efficiently as an instrument of national policy, you may be looking at a national bank as opposed to a "central bank," -- and how ironic it would be if the U.S., which pioneered the concept of a national bank, were to have gone full circle to trying to suppress those impulses in other nations. --Herschelkrustofsky 10:59, 14 Oct 2004 (UTC)
thread_title: Those I couldn't figure out at all

message: Excuse me for choking on my breakfast. The distinction here (and at national bank) is complete BS, probably driven by the peculiar status of the US Federal Reserve. A central bank is responsible for monetary policy, and is usually state-owned and non-autonomous (subject to political decision-making on interest rates etc). A "national bank" is simply a state-owned bank (when it isn't just a name for an ordinary private bank making itself sound big, eg "First National Bank"). It is a big deal when the usual central bank model (state-owned, politician-run) is not used - see the setting-up of the independent Bank of England in 1997 and ECB in 1999. (Enhanced credibility and so forth are supposed to make monetary policy more effective and enhance economic stability by leaving experts to try to hit well-defined targets. Expectations etc.) The Fed is a rare exception in being not just independent from government, but privately-owned. Rd232 14:54, 1 Jan 2005 (UTC)
replies: text: Actually, the Fed is not the exception, it is the rule. The issue here is not the technical features of ownership, but rather, the political "autonony" or lack thereof. The real "exception" was Hamilton's national bank, and no one can deny that it was a highly controversial institution, because it was the first major departure from the European practice of giving the private banking community control over monetary policy; critics of the Fed would say that the creation of the Fed was simply a reversion to that policy. --HK 15:16, 1 Jan 2005 (UTC)
replies: text: The distinction drawn in the article between "central" and "national" is at best US-only usage, at worst just wrong. A central bank makes monetary policy and is the lender of last resort; it may be public or private and have varying degrees of independence. Take C.E. Walsh, the guru of central bank inflation-targetting: on his website  you will not find the phrase "national bank" except as part of the proper name of a bank (eg Swiss National Bank). If you still disagree, please cite some sources. Rd232 16:33, 1 Jan 2005 (UTC)
replies: text: I should think that the very concept of a national bank would be anathema to "the guru of central bank inflation-targetting." --HK 16:38, 1 Jan 2005 (UTC)
replies: text: I was afraid I'd get that response. Having just had a fight to get natural monopoly conform to the standard definition in economics, I was hoping to correct this article without a battle. I can't find anything useful that relates to the supposed central/national distinction, though I gather it has something to do with historical usage in the US. Please either provide some sources or agree that you'll let me change the article. I don't want to say the distinction as outlined is completely fictional, but it isn't general. If you can show historical US usage in this way, that usage can be described in the article. Rd232 20:51, 1 Jan 2005 (UTC)
replies: text: Wrote up an article about the History of the Federal Reserve from Edward Flaherty. It explains that the national banks were private US banks with the right to issue notes that would be accepted by other national banks. There were 100s of those. --J heisenberg 19:20, 3 Jan 2005 (UTC)
replies: text: OK. But the right to issue notes is not specific to "national banks", except possibly in that historical context. In other times and places, all sorts of banks could and did issue notes. Rd232 20:50, 3 Jan 2005 (UTC)
replies: text: Agreed. National banks fall far short of central banks--I would delete the line or replace it by a comment about independence --J heisenberg 20:59, 3 Jan 2005 (UTC)

text: The political autonomy of central banks is more a matter of degrees than a dichotomous issue. Virtually all central banks walk a fine line between autonomy and political influence. The Coyne Affair in the 1950s and 60s provides an illustration. In 1956 James Coyne was appointed governor of the Bank of Canada.. He pursued a tight monetary policy, and this brought him into conflict with the government who was pursuing an expansionary fiscal policy. In 1961 Coyne was forced to resign. The following policy statement was issued by the central bank under the new governor (Louis Rasminsky) : "In the ordinary course of events, the bank has the responsibility for monetary policy, but if the government disapproves of the monetary policy being carried out by the bank it has the right and the responsibility to direct the bank as to the policy which the bank is to carry out. . . .If this policy, as communicated to the bank, is one which the governor feels he cannot in good conscience carry out, his duty is to resign." (Bank of Canada Annual Report of the Governor to the Minister of Finance, 1961). But the government came under heavy political pressure by those who felt too much power was now resting with the government, and by 1967 the Bank of Canada act was amended to delineate the scope and extent of central bank autonomy. This is the framework in which most central banks operate. They are supposed to be independent enough to be immune from the vicissitudes of political whim, yet, at the same time, ultimately responsible to a democratically elected government. Is this fine line a contradiction in terms. . . maybe. But this precarious balance is maintained by counterposing threats. On the one hand, the central bank operates under the threat of government intervention, but on the other hand, governments must live with the political fallout if they do decide to intervene. mydogategodshat 19:23, 1 Jan 2005 (UTC)
replies: text: This is the kind of discussion we should have under "independence", instead of the false central/national dichotomy. (I take it mydogategodshat is agreeing with me.) Rd232 20:51, 1 Jan 2005 (UTC)
replies: text: I agree with you up to a point. I agree that the issue is too complex to be presented as a dichotomy. A more productive view would be to represent the range of policies as a continuum with "substantial autonomy" and "minimal autonomy" as the two end points. We would find that most central banks would find themselves near the middle of a gaussian distribution. What about the extremes: Are there examples of central banks with no private sector input? . . . probably, and the term "national bank" does seem to fit. Are there examples of central banks with no input from democratically elected officials? . . . probably, although the only one that I can think of that comes close is the Fed. What term do we use for them? mydogategodshat 04:35, 2 Jan 2005 (UTC)
replies: text: There is a spectrum of independence for central banks, a term which covers everything being discussed here. If some people use "national bank" to describe part of that spectrum, fine, but I want sources, and a tight definition. The current dichotomy (especially the implication that it is widely accepted in economics) is wrong. Rd232 09:38, 2 Jan 2005 (UTC)
replies: text: I have looked through my bookshelves for references to the term "national bank". Of the five financial macroeconomics books there, only one mentions the term. George Kaufman's Money, the Financial system, and the Economy uses the term to differentiate state chartered banks from nationally chartered banks. For example on page 86 he writes, "The Comptroller was established by the National Banking Act of 1863 to charter and supervise the operation of national banks." So I cannot find any evidence to support HK's claim. Unless Hk can find some references, I must agree with you that there is no significant difference between the two terms. However I should point out that my library is populated by economics books: if it consisted of political economy or developmental economics books, the results could be different. mydogategodshat 16:03, 3 Jan 2005 (UTC)
replies: text: Part of the confusion could be the result of multiple meanings of the term. To use the term to indicate a member bank of the Fed is quite different from the way it could be used in less developed countries. mydogategodshat 16:17, 3 Jan 2005 (UTC)
replies: text: Multiple meanings is part of the problem; though not sure any of them conform to HK's approach. The "central bank" is the official executor of government monetary policy, regardless of name (which may or may not include "National") or ownership or degree of independence. Basta. Rd232 19:12, 3 Jan 2005 (UTC)
replies: text:  How sad that the discussion is so small, the corporate media is doing it's job very well.Pepitopax 20:59, 15 April 2006 (UTC)
thread_title:  Central bank v national bank 

message: The article says: 
* Marginal Lending Rate (currently 3% in the Eurozone) A fixed rate for institutions to lend money from the CB
Shouldn't this be a rate for institutions to borrow money from the CB?  Barrylb 15:23, 3 Jun 2005 (UTC)
thread_title: Interest rates

message: I have removed the mention of a "2% deposit requirement in the Eurozone" because I don't believe such a requirement exists. I've also added a bit about capital requirements. My sources for this are searching  using terms "deposit requirement" and "bank regulatory requirement" and . I am of course willing to be proved wrong regarding the reserve requirement. The Land 09:30, 20 October 2005 (UTC)
thread_title: Reserve requirements

message: Does anyone know what the following is supposed to mean? "Partly due to concerns about asset inflation and term repurchase agreements, and difficulties in measuring liabilities as accurately as pricing assets, capital requirements are considered more effective than deposit/reserve requirements in preventing indefinite lending: when at the threshold, a bank cannot extend another loan without acquiring further capital on its balance sheet."
This sounds like nonsense to me, but maybe I just don't get it. The usual understanding with banks is that the liabilities are fairly easy to understand (pace strange derivatives, etc); it's the assets that are unclear. I'd edit, but I don't even know what the author is trying to get at.--Gregalton 22:07, 12 December 2006 (UTC)
thread_title:  Capital requirements 

message: Some might find this link intresting.
http://www.tv-links.co.uk/video/9/6883/10985/68389/95863#
89.16.66.150 04:49, 28 August 2007 (UTC)
thread_title:  Documentry 

message: Hi,
There's one thing I guess I'd like explained somewhere, but I don't even know if I understand the issues correctly.
As far as I understand, not all e.g. dollar-denominated money exists as bank notes, but a majority of it in some kind of digital form. I guess this corresponds in a sense to an individual having dollars deposited on some bank.
Do individual banks then have such accounts in the central bank? Or, what actually defines the amount of money a certain bank has? If a bank A wants to transfer money to bank B, how does the actual transfer happen if not in bank notes? Is it done by bank A announcing a transfer to the central bank, which updates the authoritative record of how much digital money those banks have?
If it works something like this, does it also mean that a government can by decree confiscate or freeze all digital dollars from some "rogue country" (who e.g. doesn't want to pay its debts)? Doesn't the amount of dollars owned by foreign central banks exceed the amount of notes in circulation?
I seem to remember that there used to be large (e.g. $100k or $1M or £1M) banknotes for such use. I guess that's no longer true? --SLi (talk) 20:54, 4 January 2009 (UTC)
thread_title:  Is the central bank the ultimate authority for how much other banks have (non-printed) money? 

message: It's very important, it's constantly being talked in the news and I bet most people have no idea how it works unless they've got a degree in economics while it affects their lives immensely. --AaThinker (talk) 13:17, 5 April 2009 (UTC)
thread_title:  [[Central_bank#Interest_rates]] should have its own article 

message: also the bank arose from the bank "Stockholm Banco" which was Swedens oldest bank and the first European bank that printed money.
Perhaps this is should be in the text?  —Preceding unsigned comment added by 194.103.203.254 (talk) 09:06, 26 March 2010 (UTC)
thread_title:  The Swedish Riksbank is the oldest centralbank in the world but... 

message: I am not sure what this is trying to say: "The situation in Cuba is so exceptional as to require the Cuban peso to be dealt with simply as an exception, since the United States forbids direct trade with Cuba. US dollars were ubiquitous in Cuba's economy after its legalization in 1991, but were officially removed from circulation in 2004 and replaced by the convertible peso." -- Beardo (talk) 15:25, 26 April 2010 (UTC)
thread_title:  Cuba 

message: Even when targeting interest rates, most central banks have limited ability to influence the rates actually paid by private individuals and companies. In the most famous case of policy failure, George Soros arbitraged the pound sterling's relationship to the ECU and (after making $2 billion himself and forcing the UK to spend over $8bn defending the pound) forced it to abandon its policy. Since then he has been a harsh critic of clumsy bank policies and argued that no one should be able to do what he did.
Does anybody have a credible source that Soros said this, or are we just taking his word on it? --Kluutak (talk) 18:51, 22 April 2011 (UTC)
replies: text: Yes, the first sentence is very badly phrased or nonsensical, and conflicts with the accurate prior paragraph. Central banks & governments can completely control the interest rates on their own debt. They just can't do this & control exchange rates too. The basic, risk-free rates they pay are different from and lower than "the rates actually paid by private individuals and companies" which of course are less within their control, unless the government & central bank engage in direct lending to private individuals and companies. But this has nothing to do with exchange rates or control over basic domestic risk-free rates, or this section, so I just removed the offending first sentence. I think the rest of the para about Soros is accurate.John Z (talk) 01:07, 24 June 2012 (UTC)

text: Kluutak , I guess John Z's long winded answer was  "no" ! --Wuerzele (talk) 14:55, 1 October 2015 (UTC)
thread_title:  Could we have a source for this? 

message: why not mention it in the article? 188.2.172.171 (talk) 18:12, 12 July 2011 (UTC)
thread_title:  African Central Bank 

message: http://www.foreignpolicy.com/articles/2011/11/28/the_global_thinkers_20_most_recommended_books?page=0,0 The Global Thinkers' Book Club; Want to think like the world's best minds? Start by reading like them. The Foreign Policy Global Thinkers' 20 most recommended titles.  NOVEMBER 28, 2011
1. Lords of Finance: The Bankers Who Broke the World (2009) by Liaquat Ahamed.
Recommended by Nancy Birdsall, Deepa Narayan, and Paul Ryan.
Excerpt ... 
99.19.42.30 (talk) 08:05, 4 December 2011 (UTC)
replies: text: See Lords of Finance.  141.218.36.41 (talk) 22:53, 6 December 2011 (UTC)
thread_title:  '''Further Reading''' resource 

message: As of December 2011, the U.S. Federal Reserve Bank has a $2.8 trillion balance sheet (assets/liabilities) against $50 billion in capital. This makes the bank leveraged 56 to 1. Has a central bank ever been leveraged to this degree?  — Preceding unsigned comment added by 63.150.169.180 (talk) 05:09, 14 December 2011 (UTC)
thread_title:  Size of balance sheet? 

message: Or are all such institutions create money as debt to be repaid at interest..?--Namaste@? 19:11, 8 January 2012 (UTC)
thread_title: Is there any country today that has a central bank not creating interest-bearing debt-money?

message: Only a few nations are without Debt based Central Banks
(Rothchild and Royal Family owned): Iran; N. Korea; Sudan; Cuba; and Libya.
Iraq and Afgan where on this list but not now --- Stay tuned -Libya soon to follow
also monaco and Andora.(but these are tax havens for the super rich)
All you conspiracy buffs, I bet you can see a connection --Namaste@? 05:43, 29 August 2012 (UTC)
thread_title:  Countries without a central bank 

message: First time here on wiki:
these paragraphs in the text are 100% accurate,imo:
:By far the most visible and obvious power of many modern central banks is to influence market interest rates; contrary to popular belief, they rarely "set" rates to a fixed number. Although the mechanism differs from country to country, most use a similar mechanism based on a central bank's ability to create as much fiat money as required.
:
:The mechanism to move the market towards a 'target rate' (whichever specific rate is used) is generally to lend money or borrow money in theoretically unlimited quantities, until the targeted market rate is sufficiently close to the target. Central banks may do so by lending money to and borrowing money from (taking deposits from) a limited number of qualified banks, or by purchasing and selling bonds. As an example of how this functions, the Bank of Canada sets a target overnight rate, and a band of plus or minus 0.25%. Qualified banks borrow from each other within this band, but never above or below, because the central bank will always lend to them at the top of the band, and take deposits at the bottom of the band; in principle, the capacity to borrow and lend at the extremes of the band are unlimited.[10] Other central banks use similar mechanisms.
The ECB, f.e., has a fixed rate for its "Main refinancing operations" (as you can see here http://www.ecb.int/stats/monetary/rates/html/index.en.html)
This rate is truly fixed, it is not a variable tender rate as it was in the past.
More info can be found here: 
:The Eurosystem may execute its tenders in the form of fixed rate or variable rate tenders. In the former, the ECB specifies the interest rate in advance and participating counterparties bid, the amount of money they wish to transact at the fixed interest rate. In the latter, counterparties bid both the amount of money they wish to transact and the interest rate at which they wish to enter into the transaction. Counterparties may submit multiple bids with different interest rate levels. In each bid, they must state the mount of money that they are willing to transact at the respective interest rate. The Governing Council may set a minimum bid rate for variable rate tenders in order to signal the monetary policy stance. Under both tender procedures, the ECB decides the amount of liquidity to be provided. In a fixed rate tender, this normally implies a pro rata allotment to the participating banks, depending on the ratio between total bids and total liquidity to be allotted. In a variable rate tender, the bids with the highest interest rates are satisfied first, followed by bids with successively lower rates, until the total amount of liquidity to be provided is exhausted. At the lowest accepted rate, the “marginal rate of allotment”, bids are satisfied pro rata in line with the ECB’s decision on the total amount of liquidity to be allotted. For each individual allotment, the interest rate is equal to the interest rate bid. In exceptional circumstances, the ECB may decide to allot all the liquidity requested by counterparties, i.e. to accommodate all bids in full. This full allotment procedure was introduced during the period of acute financial market tensions which began in 2007. 
http://www.ecb.int/pub/pdf/other/monetarypolicy2011en.pdf?707986c2746234cac7c14158ae98c125  — Preceding unsigned comment added by HugeLorry (talk • contribs) 18:35, 13 July 2013 (UTC)
thread_title:  Implementation of main interest rate 

message: I decided to be bold and remove this sentence from the article because I believe it to be too ambiguous: "In most cases they are not public, in the sense that they are neither state-owned nor directly regulated by government, parliament or another elected body."
While almost all central banks are structured to have independence from the government, most of them are state-owned. The US Federal Reserve is an interesting exception, having a system of member banks although not "ownership" as we would normally understand it (the full explanation is given elsewhere on this talk page). Most central banks are owned by their national government yet have an independent board, leading to the confusion. The phrase "directly regulated" is also confusing - most countries subject their central banks to standard audit procedures, even though they can act independently.  — Preceding unsigned comment added by 59.167.122.159 (talk) 12:41, 5 February 2014 (UTC)
thread_title:  Not usually state owned? 

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thread_title:  External links modified 

message: Dr. Dai has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
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thread_title:  Dr. Dai's comment on this article 

message: The silver coin has been gold plated, and made into a pendant, it has the head of Paul von Hindenburg, with 1847- 1934, the reverse has the Eagle with the position of the swastika indented out, the gold plate has been applied after the indentation. it has Deutsches Reich 1938, plus 2 Reich's mark. the rim inscribe with, Gemeinnutz Geht Vor Eigennutz, in English( Common Good Before Self), I understand some German banks issued them after the second world wall. Where they celebrating the end of Nazi Germany, any information would be welcome.  — Preceding unsigned comment added by 92.14.57.154 (talk) 09:52, 2 June 2018 (UTC)
thread_title:  trying to find information about release by German banks, of Paul von Hindenburg 2 Reichs mark, dated 1938,   

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thread_title:  A Commons file used on this page or its Wikidata item has been nominated for deletion 

message: I think this page has too much emphasis and overlap with monetary policy. I would propose the following re-arrangements:
* The "central bank" entry should offer an overview of central banks's history, governance, activities (ie.  monetary policy : supervision, coins and notes issuances etc.). 
* the monetary policy page should be more detailed about central banks's price stability objectives and tools. Currently it's  the opposite.
So i would transfer the sections on policy instruments to monetary policy and restructure the central bank page to give more prominence to central banks governance and other activities.
Any remarks / objections to this approach?  — Preceding unsigned comment added by Stanjourdan (talk • contribs) 14:32, 12 December 2020 (UTC)
thread_title:  Overlap with monetary policy 

message: Central bank#Early history starts off with mishmash attempts to explain how money began - its explanation and genesis feels amorphous, and worse it's supported by a dead link. We propose lifting a few words from one JSTOR article for a definite date money began. See blockquotes below, inputs / suggestions / alternatives welcome. Thanks in advance and a few more points:
(1) We can dispense with 2nd edit re: "Gold 1400BC" and leave "Egyptian shat" but that leaves open the dead link for more challenges down the road. Proposal to substitute with "Gold 1400BC" clears this headache for good in favor of just once source. Caveat though that finding "gold shat" is really obscure for reinforcements with WP:RS.</br>
(2) Final sentence not touched, out-of-scope here for now but can be proposed later.</br>
(3) Propose no changes notwithstanding the concerns - the proverbial the enemy being the enemy of the good?
The use of money as a unit of account predates history.Establishing the origins of commodity money requires written records on which historical commodities served the various functions of money. In ancient Mesopotamia silver and barley were known to have served as basic monies from 2500 BC or earlier, with their monetary uses well-attested to in documents of nearly all periods and areas.Powell (1996). Money in Mesopotamia. Journal of the Economic and Social History of the Orient, 1996, Vol. 39, No. 3, pp. 224-242. https://www.jstor.org/stable/2601227 Government control of money is documented in the ancient Egyptian economy (2750–2150 BCE).Monetary Practices in Ancient Egypt. Money Museum National Bank of Belgium, 31 May 2012. Retrieved 10 February 2017. The Egyptians measured the value of goods with a central unit called shat. Like many other currencies, the shat was linked to gold. The value of a shat in terms of goods was defined by government administrations. Gold's monetary use was limited by its rarity, and served more as commodity than money before c 1400 BC. Other cultures in Asia Minor later materialized their currencies in the form of gold and silver coins.Metcalf, William E.  The Oxford Handbook of Greek and Roman Coinage, Oxford: Oxford University Press, 2016, pp. 43–44
Oppa gangnam psy (talk) 21:26, 2 May 2022 (UTC)
thread_title:  Inputs needed - improved rewrite of "early history" of money 

message: Because you are all ignoring the (((800 pound gorilla))) in the room 2601:881:81:4040:0:0:0:F4EE (talk) 20:22, 2 September 2022 (UTC)
thread_title:  There should be a section on who RUNS all the worlds central banks 

message: Theory of central bank 2409:4056:11D:ACEA:0:0:2262:AD (talk) 08:53, 14 April 2024 (UTC)
thread_title:  Theory of central bank