What's the point of central banks?
Like the drummer in a band, central banks sit at the heart of modern economies. Read any financial news article and you’re likely to come across references to these arcane institutions: the Federal Reserve in the US, the Bank of England, or the European Central Bank (ECB). They play a key part in maintaining economic health – it’s their job to maintain the rhythm.
What do they actually do? For one, they’re in charge of printing money – though nowadays this is an electronic process. They oversee commercial banks (like HSBC or Chase – the ones you or I are used to dealing with on a daily basis), lending money to them and setting rules that prevent them from doing anything too risky. If a person or a company takes out a loan from a commercial bank, shiny new electronic money is deposited
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