Explore tens of thousands of sets crafted by our community.
Central Banking Terms
15
Flashcards
0/15
Capital Requirements
Regulatory standards for banks that determine the minimum amount of capital a bank must hold in relation to its assets.
Inflation Targeting
A monetary policy strategy aimed at keeping inflation within a specified range, usually by adjusting interest rates.
Federal Funds Rate
The interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight.
Quantitative Easing
A monetary policy where the central bank purchases longer-term securities from the open market to increase the money supply and encourage lending and investment.
Open Market Operations
The buying and selling of government securities by the central bank to control the money supply and interest rates in the economy.
Discount Rate
The interest rate charged by central banks on loans to commercial banks. This rate influences the liquidity of money and can be used as a monetary policy tool to manage inflation and economic growth.
Reserve Requirements
The regulatory mandate that specifies the minimum amount of reserves a bank must hold against deposits. This affects the amount of money the bank can lend.
Forward Guidance
A central bank communication strategy to influence the financial decisions of market participants by providing information regarding future monetary policy actions.
Central Bank Independence
The degree to which a central bank can make decisions without political interference, allowing for the pursuit of long-term policy goals like controlling inflation.
Negative Interest Rate Policy
A monetary policy tool where central banks set nominal target interest rates below zero percent to incentivize banks to lend more and stimulate economic activity.
Liquidity Adjustment Facility
A tool used by central banks to aid banks in managing their liquidity position through the provision of short-term funds.
Monetary Policy
The process by which a central bank controls the supply of money in an economy, primarily through the manipulation of interest rates.
Target Inflation Rate
The optimal rate of inflation determined by a central bank to foster economic growth while maintaining the stability of currency.
Central Bank Digital Currency (CBDC)
A digital form of national currency issued and regulated by the central bank, intended to complement or replace traditional currency.
Macroprudential Regulation
Regulations aimed at reducing risks to the financial system as a whole (systemic risk) through policies affecting the financial industry.
© Hypatia.Tech. 2024 All rights reserved.