2min chapter

The "What is Money?" Show cover image

An Examination of Central Banking with Joseph Wang (WiM234)

The "What is Money?" Show

CHAPTER

What's the Point of a Central Bank?

The basis of these operations is the creation of money from nothing. Ultimately, if you think about it, historically, what's the point of a central bank? It's to act as a lender of last year's work to the commercial banking system. Over time though, this function has evolved. The central banks today are not just lenders of last resort to commercial banks, but they are also lenders of last resorts to a growing portion of the financial economy.

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