Definition of central bank

The Bank Central is a institution public financial, maximum authority in monetary matters, which exists in a good part of the countries of our planet and which among its various and important functions has the mission of issuing legal money, designing and executing the politics monetary.

Generally, in all countries it is an entity that enjoys autonomy and independence with respect to government in turn, although it is impossible to ignore that their directors and officers are also appointed by the executive powers, with which they tend to respond to government policies.

The value of the currency, the stability of prices and the stability of the Finance systemare three essential issues that the central bank must address and it is because of this situation that the central bank stands as a key piece in the economy from any country.

Unlike what happens with any other public or private financial institution, the central bank does not have the clients to individuals or companies, but their clients are the state, and on the other hand the banks that operate in the

territory of the Central Bank, whether private or public. Refering to methodology that it holds does not differ too much from the one presented by any bank, since the Central Bank accepts deposits that come from its clients and keeps them in accounts that it will open for them and it is through these accounts that the clients of the Central Bank carry out their transactions.

On the other hand, the Central Bank is also authorized to grant loans to client banks that have liquidity problems and also to other nations that need it.

In addition, the Central Bank is in charge of ensuring the country's reserves that it jealously guards in its coffers.

It should be noted that in order to operate in the indicated manner, the Central Bank issues legal tender money and is the only financial organization capable of doing so. Meanwhile, he will entrust the Mint the manufacture of banknotes and coins that will later be distributed among the banks of the commercial circuit.

Topics in Central Bank