When were most emerging market central banks established?
After WWII.
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| Term | Definition |
|---|---|
| When were most emerging market central banks established? | After WWII. |
| What were the original functions of central banks? | Issuance of banknotes |
| What are modern functions of central banks? | Regulating national currency value |
| Ownership structure of most central banks? | Mostly publicly owned; a few privately owned (e.g. |
| When was the ECB established? | June 1 |
| What is the Eurozone? | EU member states that have adopted the euro as their currency. |
| What is the Eurosystem? | ECB plus NCBs of euro area member states. |
| What is the ESCB? | ECB plus NCBs of all EU member states |
| Who owns the ECB? | Central banks of the 27 EU member states. |
| What is the Governing Council of the ECB? | Main decision-making body responsible for monetary policy and price stability. |
| Who is in the ECB Executive Board? | President |
| Role of the ECB General Council? | Encourage cooperation among NCBs |
| Three main objectives of ECB monetary policy? | Maintain price stability |
| ECB key policy interest rates? | Deposit facility rate |
| What is unconventional monetary policy? | Measures used when standard policy is ineffective |
| What is ELA? | Emergency liquidity assistance for solvent banks facing temporary liquidity issues. |
| What is Quantitative Easing? | Central banks buy bonds/assets to increase money supply and stimulate the economy. |
| Federal Reserve ownership? | Independent entity |
| Fed main components? | Board of Governors |
| ECB vs Fed primary objective? | ECB: price stability. Fed: dual mandate (price stability and employment/growth). |
| Bank of England independence? | Makes monetary policy independently from the ECB; Monetary Policy Committee decides interest rates. |
| Tools for Bank of England monetary policy? | Raising/lowering interest rates; quantitative easing if rates near zero. |
| Why central bank independence matters? | Reduces political pressure that could cause inflation or political business cycles. |
| Arguments against CB independence? | Macroeconomic stability may be better if coordinated with fiscal policy; risk of bureaucratic self-interest. |
| Trend in central bank independence? | Globally increasing independence |