Central Banks

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  • Created by: Joe
  • Created on: 21-01-22 08:46
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  • Central Banks
    • Monetary Policy Commitee (MPC)
      • Changes in the BANK RATE
        • factors considered
        • transmission mechanism
          • interest rates
            • Act on C + I and(X-M)
    • instruments
      • Quantatative easing
        • Supply of money
          • influence change in money supply
            • broad money not narrow money
              • Not printing
            • open market sale of bonds
              • release locked away
      • Funding for lending
      • forward guidence
    • functions
      • Supply of money
        • influence change in money supply
          • broad money not narrow money
            • Not printing
          • open market sale of bonds
            • release locked away
      • influence interest rates
      • Exchange rate
        • Changes impact on AD
        • Impact on Economic objectives
          • Inflation
          • Balance of payments
          • Unemployment
        • interest rates
          • Act on C + I and(X-M)
        • BofEng - buy and sell currency influence exchange rate
        • higher investor return
          • assets demand increases
      • Lender of last resort
        • protect against systemic risk
          • 2008 financial crisis
            • Change rules regulations
      • objectives set by government
        • Price Stability
          • wider objectives
      • Bankers bank
        • hold assets commercial banks
  • Target Inflation
  • bonds

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