In many countries and currency unions like the EU, the main financial regulator, the lender of last resort, and the main manager of deposit insurance and interest rates is the central bank. Central banks can provide stability and, perhaps, direct the course of commercial activity. They can also be a source of instability, however, as they distort prices and alter balance sheets.
The Federal Reserve, Born in Crisis, a Product of Government
The power to stabilize and disrupt individual plans and financial markets was not a power people treated lightly. Debates surrounding the creation of the Federal Reserve system—the central bank in the United States—and whether it should have explicit powers to regulate the supply of ...
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