| a bank, as the Federal Reserve Bank, that holds basic banking reserves, issues currency, and acts as lender of last resort and controller of credit. |
| central bank n. A nation's principal monetary authority, such as the Federal Reserve Bank, which regulates the money supply and credit, issues currency, and manages the rate of exchange. |
Central Bank
The entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of responsibilities - from overseeing monetary policy to implementing specific goals such as currency stability, low inflation and full employment. Central banks also generally issue currency, function as the bank of the government, regulate the credit system, oversee commercial banks, manage exchange reserves and act as a lender of last resort.
Investopedia Commentary
The central banking system in the U.S. is known as the Federal Reserve System (commonly known as "the Fed"), which is composed of twelve regional Federal Reserve Banks located in major cities throughout the country. The main tasks of the Federal Reserve are to supervise and regulate banks, implement monetary policy by buying and selling U.S. Treasury bonds (T-bills), and steering interest rates. Alan Greenspan currently serves as the Chairman of the Board of Governors of the Federal Reserve.
Related Links
What Are Central Banks?
The Federal Reserve (the Fed) Tutorial
Formulating Monetary Policy
See also: Alan Greenspan, Bank, Bank for International Settlements, Federal Reserve Board - FRB, Inflation, Lender of Last Resort, Monetary Policy, Open Market Operations, The Federal Reserve, Treasury Bill - T-Bill
central bank