Concept of central bank, Managerial Economics

Concept of Central bank

M.H. De Kock concept of central bank is superior to that of others as it is more inclusive. His long definition of central bank includes many of the important functions performed by the central bank. However his definition lacks brevity which is an essential quality of any definition. According to De kock a central bank is a bank which constitutes the apex of the monetary and banking structure of its country and which performs as best as it can in the national economic interest the following function.

1.The regulation of currency in accordance with the requirements of business and the general public, for which purpose it is granted either the sole right of note issue or at least a partial monopoly thereof.

2.The performance of general banking and agency services for the state.

3. The custody of the cash reserves of the commercial banks.

4. The custody and management of the nation reserves of international currency.

5.The granting of accommodation, in the form of rediscounts or collateral advance, to commercial banks, bill brokers and dealers, or other financial institution and the general acceptance of the responsibility of lender of the last resort.

6The settlement of clearance balances between the banks.

7.The control of credit in accordance with the needs of business and with a view to carrying out the broad monetary policy adopted by state.

A further requisite of real central bank is that its should not to any great extent perform such banking transactions as accepting deposits form the general public and accommodating regular commercial customers with discounts or advances. It is now almost generally accepted that a central bank should conduct direct dealings with the public only in such forms and to such extent s in the circumstances of the particulars country. It considers absolutely necessary for the purpose of carrying out its monetary and banking policy.

Posted Date: 12/1/2012 5:40:43 AM | Location : United States







Related Discussions:- Concept of central bank, Assignment Help, Ask Question on Concept of central bank, Get Answer, Expert's Help, Concept of central bank Discussions

Write discussion on Concept of central bank
Your posts are moderated
Related Questions
In the country of Sleep-well, the inhabitants' main activity is... sleeping. Despite the loss of productivity that this entails, the country has a profuse and renowned production o

Q. Explain about isocost line? In economics, an isocost line signifies all combinations of inputs that cost the same total amount. Though, similar to the budget constraint in c

NOMINAL RIGIDITIES VERSUS REAL RIGIDITIES    Nominal rigidities are said to exist when nominal prices and wages  do  not change in  the  face  of  conditions that call for thei

Measuring Point Elasticity on a Linear Demand Curve To explain the measurement of point elasticity of a linear demand curve, let's suppose that a linear demand curve is given b

The Firm The unit that uses factors of production to produce commodities then it sells either to other firms, to household, or to central authorities. The firm is thus the uni

Your discussion assignment this week is associated with the Pilgrim Bank case. Using the attached file, answer the following questions: A. Is there a difference in profitability ac

Danger of over-specialising   A country may feel that in its long-term interests it should not be too specialized. A country may not wish to abandon production of certain

Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment

different types of markets and role in managerial economics

Using the National Output for Calculating National Income A final method which is more direct is the "output method" or the value added approach .  This involves adding up