US, UK, EU Central BanksHassan AhmedGroup 4 – M1 GEI

INDEX

I- US CENTRAL BANK

II- UK CENTRAL BANK

III- EU CENTRAL BANK

CONCLUSION

INTRODUCTION

Generally, a central bank is a public institution that manages a state’s currency, money supply and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank,

A central bank is the only organisation able of increasing the nation's monetary base, and usually also prints the national currency

There are a lot of Central banks and in this presentation, we’ll focus on three of them : Fed, Bank of England and ECB.

First of all, I’ll talk about the creation of these central banks, after that I’ll present their role and objectives and I’ll conclude by saying some words about their interactions and interventions

US CENTRAL BANK (The Fed)

The Federal Reserve System was created by Congress as the U.S. central bank.

President Woodrow Wilson signed the Federal Reserve Act on December 23, 1913.

Why creating the Fed : the U.S. economy had frequent episodes of panic, bank failures, and credit problems.

US CENTRAL BANK

STRUCTURE

• Board of Governors

• Federal Reserve Banks

• Federal Open Market Committee

• Financial Regulatory Reform

US CENTRAL BANK

US CENTRAL BANK

Monetary Policy

• Setting Monetary Policy: The Federal Funds Rate

• Implementing Monetary Policy: The Fed's Policy tools :

– Open Market Operations

– The Discount Rate

– Reserve Requirements

– Interest on Reserves

– Temporary, Nontraditional Tools

US CENTRAL BANK

• Play the ChairMan of the FED

• http://www.frbsf.org/education/activities/chairman/

UK CENTRAL BANK

• The Bank of England is the central bank of the United Kingdom.

• Also called 'Old Lady' of Threadneedle Street.

• the Bank was founded in 1694, nationalised on 1 March 1946, and gained independence in 1997.

• Sir Mervyn King - Governor

UK CENTRAL BANK

The  Bank of England, formally the  Governor and Company of the Bank of England is the  central bank  of the  United Kingdom.

Established in 1694, by a group of merchants and parliamentarians led by sir William Paterson.

it is the second oldest central bank in the world,

It was established to act as the  English Government's bank.

UK CENTRAL BANK

EU CENTRAL BANK

The European Central Bank was created on 1 June 1998.

Seven months to prepare :

Replacing the currencies of a group of states with a single currenc

Devising a monetary policy for the euro area.

EU CENTRAL BANK

The ECB is the central banking system of the euro area Conducting monetary policy for the countries in the currency union. I

ts primary objective is price stability over the medium term, because stable prices form the basis for sustainable economic growth and prosperity in Europe.

1 June 1998 also saw the creation of the "European System of Central Banks" : the ECB and the central banks of all the EU's Member States.

EU CENTRAL BANK (ECB)

ECB's TASKS :--Defining Eurosystem policies

--Deciding, coordinating and monitoring

--themonetary policy operations

--Adopting legal acts

--Authorising the issuance of banknotes

– Interventions on the foreign exchange markets:

– The operation of payment systems and the oversight of payment and other financial market infrastructures

DIFFERENCES TO BE CONSIDERED

ECB FED BoE

The problems to be addressed :

a sovereign debt banking crisis

a subprime banking crisis

a subprime banking crisis

monetary transmission mechanisms:

through banks. financial markets financial markets

number of participants:

seventeen Treasuries and sovereign debts

a single Treasury and a single sovereign debt

a single Treasury and a single sovereign debt

The lender of last resort function:

more limited

Normly limited Normaly

Transparence : less More More

interest rates: Stiffer Flexible Flexible

CONCLUSION

Central Banks have a heavy role in our modern economy

Controlling currency, inflation unemployment

Question is :

What would be the new tools that could be used by CB to prevent future crisises ?

References

http://www.bankofengland.co.uk/about/Pages/default.aspx

http://www.frbsf.org/what-is-the-fed/

http://www.ecb.int/ecb/orga/escb/html/index.fr.html