Central Bank

A central bank is the main monetary authority of a nation. The central bank normally issues currency, holds the deposits of member banks, administers monetary policy, determines interest rates and otherwise controls credit, and generally directs and facilitates the banking industry of a nation. Central banks are usually responsible for managing certain economic goals, including the stability of currency, target levels of unemployment, and low levels of inflation.

Central banks are sometimes called the “lender of last resort” since banks that might otherwise be forced to close may be bailed out by loans from the central bank. In the U.S., the central bank is the Federal Reserve System