Central Bank

An entity responsible for monetary policy of a country or a group of countries(such as the European Central Bank acting as the central bank of the European Union). Central banks have a large amount of responsbilities, including currency stability, low inflation, full employment and regulatory powers . Central banks can act as a lender of last resort during a financial crisis.

Central banks set interest rates, reserve requirement ratios, supervise banks, collect and publish economic data and sometimes even engage in intervention in the financial markets(usually in the currency markets). Central banks may be the most powerful player in the financial markets and their actions are watched closely by market players.

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