Chapter 11The Role of Central Banks in Global Macro

A central bank is defined by the Federal Reserve Bank of Cleveland as:

[T]he authority responsible for policies that affect a country’s supply of money and credit. More specifically, a central bank uses its tools of monetary policy which include changing interest rates, open market operations, discount window lending, changes in reserve requirements—to affect short-term interest rates and the monetary base (currency held by the public plus bank reserves) and to achieve important policy goals.1

Central banks are referred to as both reserve bank and monetary authority, among other names.

This chapter outlines the key roles and activities of central banks, to help you better understand how ...

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