how does a central bank work
A central bank is like a bank for all other banks — it’s the boss. Central banks do lots of important things like helping countries manage their money, printing new money, and making sure banks are lending money safely.
The central bank sets rules for what other banks are allowed to do, such as how much money each bank can lend out, the interest rates they can charge, and when the banks can lend money. The central bank also helps governments manage their money by setting taxes, controlling how much money is printed, and deciding how much money each country can borrow.
Central banks also help keep economies running smoothly by monitoring prices and making sure they don’t go too high or too low. They also keep an eye out for any unusual activity in the banking sector to make sure that banks are being managed safely and responsibly.
The central bank sets rules for what other banks are allowed to do, such as how much money each bank can lend out, the interest rates they can charge, and when the banks can lend money. The central bank also helps governments manage their money by setting taxes, controlling how much money is printed, and deciding how much money each country can borrow.
Central banks also help keep economies running smoothly by monitoring prices and making sure they don’t go too high or too low. They also keep an eye out for any unusual activity in the banking sector to make sure that banks are being managed safely and responsibly.