Central bank in a global economy

Central bank in a global economy

Critical Analysis Template

Principle

This project is on role of central bank in a global economy. Central bank plays varying degree of functions within global economy. Their functions vary from less developed countries to more developed countries.

Central Bank is considered to be monetary authority within a country which controls money supply within nation, regulates the commercial banking system, implement monetary policy and highlights the country in international financial matters. With evolution around the world and many variety tasks being performed around the globe among them one specific task is Central Banking. It is amongst one of the vital functions performed by government and it is being present since as long as money itself has existed. Central Bank perform various functions among them some important functions are to act as a bank for the government, check and monitor private banking system, establishes and incorporate domestic monetary policy, and influence the nation's currency value. Central banks considered as a part of this architecture- amongst them which are to be most powerful are lying at the edges of the system- although they were developed as instrument of national policy. Hence it is positioned to become and remained a world financial hub.

Practice

This subject provides a varying degree of knowledge over functioning of central banks and their roles in less developed and more developed economies. It will able to help economists to evaluate central bank effectiveness in upcoming times.

This topic is widely known and to be understandable all across the nations.

Particulars

In this paper, it will highlight four aspects initially central bank origin, then its role and functions in a global economy, effects of globalization on it, further its role in less developed economy and lastly role in more developed countries as compare to less developed countries.

Central bank origin part reveals that Central bank to be regarded as national institutions, establish with specific connection in the life of their home countries in order to identify various kind of problems. These problems are not identical at every time. Initially, Central bank was supposed to facilitate the financing of government in exchange that is being regarded as a monopolistic in issuing fiat currency. After that many central bank came into existence after the serious crash of the economies towards bankruptcy to be moderator in that time and act as the domestic banking system's “lender of the last resort” through which they able to meet up liquidity issues by providing unlimited liquidity to match up with a run on deposits.

Further it will highlight its various roles in a global economy as controls the money supply through influencing short-term interest rates, enforcing reserve requirements and undertaking open market operations. Monetary policy will have varying limiting, augmenting and stabilizing effects on the economic growth, inflation rate, and, unemployment. Furthermore, actions taken by central bank may also have impact on financial strength as well as the exchange rate of currency.

Further it reveals changes central banks required to make in order to deal with six ...