Central Bank is considered the center of the banking system, as is the link between the credit institutions of all levels.It establishes a common regulatory framework and legal basis for the activities of banks, through which lenders can not only communicate within the country and abroad, that is, to carry out international transactions.That is why the central bank, which must be carried out to them online, are essential for the economy as a whole and its position on the world stage.
country's central bank will only work effectively when the government gives him the right to make their own decisions.Thus, only the full state non-intervention will create a quality system in the field of banking.The less pressure from the government to the central bank, the greater the opportunities in a timely manner to fulfill all its tasks.But at the same time legally all the bank's assets are state property.
the central bank can be listed for a long time, since the directions of its activities are diverse.The main of them are the monitoring of the activities of other financial institutions, the maintenance of the national currency, monetary organization, the establishment of foreign reserves and savings.But the main thing that distinguishes the central bank from a variety of commercial, it's right to issue bank notes, which can be done at other levels of the banking system.
If we talk about such a function of the central bank as reserves of the state order, then we can safely say that it helps to maintain the economy at a proper level.However, it is worth noting the dual nature, because in addition to supporting the economic sphere there is a possibility too close state intervention in the credit and financial sector.In addition, the central bank is a kind of conductor between the government and other credit institutions, because it is responsible for the strict adherence to and implementation of the goals set monetary policy.
There is a wonderful tool, with which the basic functions performed by the central bank.By varying the size refers to those interest rates.For example, if there is a need to reduce the money supply, the Central Bank decides to raise the interest rate at which it lends to commercial banks.Accordingly, the latter are forced to change the conditions of lending to legal entities and individuals.Similarly, enter the case of shortage of money in circulation, but the interest rate is reduced, which significantly reduces the cost of loans to other credit institutions.
functions of the Central Bank qualitatively executed due to the formation of compulsory redundancy fund.The Management Board at its sole discretion, determines the percentage that must be deposited by credit institutions at the Central Bank.This tool allows you to properly adjust the amount of money in circulation also FORT considered a good insurance and collateral.Thus, if there is a need to reinforce the conditions of commercial banks, the main bank increased the amount of mandatory contributions.
main functions of the central bank can be performed using a variety of tools.It is necessary to pay special attention only to the tight control of the dynamics of the results from the use of a particular method.It should adhere to the methods of regulation, which provide wide effect.Then the execution of the above functions will be carried out automatically.
