1. THE GOVERNMENT'S BANK
1.1. As the government's bank, the central bank occupies a privileged position:
1.1.1. It has a monopoly on the issuance of currency.
1.1.2. The central bank creates money.
1.1.3. Early central banks kept sufficient reserves to redeem their notes in gold.
2. THE BANKER'S BANK
2.1. Most reliable bank:
2.1.1. Government backing and abundant gold reserves make the Central Bank the safest choice for banks to deposit money.
2.2. Multi-tasking bank:
2.2.1. Financial rescue in times of crisis.
2.2.2. Manage payment system effectively.
2.2.3. Supervise the operations of commercial banks and the entire financial system.
2.3. Bank of last resort
2.3.1. The ability to create money allows the Central Bank to support other banks in the midst of a crisis.
2.3.2. No bank can withstand the massive withdrawal of money.
2.3.3. The Central Bank can support healthy banks by providing reserves or cash.
2.3.4. Effective payment system
2.3.4.1. A safe and efficient payment system is essential for the economy
2.3.4.2. The Central Bank is the payment center for banks, helping facilitate interbank transctions.
2.4. Supervision of the financial system:
2.4.1. The Central Bank supervisesthanks and financial institutions to protect depositors and investors.
2.4.2. Surveillance requires access to sensitive information, guaranteed by the government.
2.5. Power and responsibility:
2.5.1. Central banks greatly impact both stability and risk.
2.6. Things to distinguish:
2.6.1. The Central Bank does not directly control the stock market, although it can participate and supervise.
2.6.2. The Central Bank does not adjust the government budget, which is decided by the National Assembly and the President.
2.6.3. The Central Bank's main role for the government is to manage the banking activities of the Ministry of Finance.