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Central Banking

EXERCIf ^r: l

Compiete tnese sentences about Centra! Banks using the words in the box:

Central Banks, such as the Bank of England, the Federal Reserve Board in the US, and the Bundesbank in Germany:    o '

act    control

fix-    h function

impfement    influence

issue ~supervise ____L__

1 • i '.......as banks for che govemment and for other banks.

2.    .I:K~: ?\ *'?.â–  monetary policy - either the govemmenc^,s, as in Brirain, or their own, if they are

independent, as in Germany and the USA.

V //: G. che money supply, measured by different aggregaces such as MC, Ml, M2.

MC etc.    *-*i**t •</•

4. . . /<V.....che minimum interest race.

5.    ......as lender of last resort to commercial banks with liquidicv problems.

6    .    .... coins and bank notes.    N nr

7. . v. .....(floacing) exchange rates by intervening in foreign exchange markets. /

4. S iif i b 7 i 5irhe banking system.

Because a commercial bank can lend most of the tum mav lend it to another borrower, each sum ttmes. To ensure the safery of the banking system, ohliging commercial banks to deposit a certain

spb

ii,

money deposiced wich it to other borrowÄ™rs, who in of money deposiced in a bank is mulciplied several central banks impose (1): '.'^'reauirements.    'y

amount of money with che central bank ac :ero ^