What Is Central Banking System?and Its Function?


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Nouman Umar Profile
Nouman Umar answered
Before the world war first, there were only a few countries which had their own central banks. After the war the number of central banks has increased and how there is not a single country in the world which does not have its own central bank. There are many considerations underlying the establishment of a central bank. After the first war there was complete confusion in currency and exchange markets. There were large withdrawals of money from banks. The bank reserves fell below the needed level. There was no institution which could supervise the working of banks and also serve as fiscal agent. In addition to the above difficulties, there was rigidly or lack of elasticity in the supply of currency. There were also reoccurrences of failures among the commercial banks. In order to solve the monetary problems of the countries and set them on healthy footings a conference was held at Brussels in 1920. It was decided in that conference that to control the supply of money and credit in the economy and maintain stable business conditions each country must establish its own central bank.

The central bank of Pakistan named as the State Bank of Pakistan was established in July 1, 1948. It is the main monetary authority in our country.
Anonymous Profile
Anonymous answered
The central bank in the u.s. ( the federal reserve ) is to keep the u.s. In deep debt . Debt=control. Iraq under saddam husseins rule hade a state run economy. It was a economy the international banks & corporations could not go in & take over. The iraq war mainly was a demonstration to what happens if a nation defies international banking & corporations. The u.s. Military tool was put to use.

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