Central Banks

Central Bank, like the name suggests, are at the center of the monetary universe! And probably never been as centerstage and in the limelight as they are right now in their war against inflation!

A central bank is a financial institution that is responsible for overseeing the monetary system of a country, regulating its money supply and setting interest rates. Ironically, it is popular misconception that Central Banks create money. They dont! In reality, Commercial Bank create new money ! Dont believe it? Take the TCB The Fed Demystified Course to know more!


Good job! You know your basics well !

Better luck next time !

#1. Which bank is the world’s oldest central bank?

Although the Amsterdamsche Wisselbank is often considered to be the first historical model of a central bank, the Sveriges Riksbank was the actual first central bank and is still in operation today.

#2. The Federal Reserve was established in 1913. A US Representative by the name of George Ross protested against the Federal Reserve Act. He disagreed with …

In the debate over whether to pass the Federal Reserve Act, Rep. George Ross Smith of Minnesota carried onto the floor of the House a 7 foot by 4 foot wooden tombstone, a prop meant to “mourn” the deaths of industry, labor, agriculture, and commerce, the result, he said, of putting political appointees in charge of the newly formed central bank.

#3. You would rarely see Jean-Claude Trichet's name spent out in full. Do you know why?

His full name, Jean-Claude Anne Marie Louis Trichet, is just too long!

#4. Which central bank has the largest gold reserves in the world?

The United States stands at the top of the World Gold Council’s report, with gold holdings of around 8000 tonnes. China is said to hold close to 2000 tonnes. There are a number of people and reports who believe that China’s gold reserves might be significantly higher than the said 2000 tonnes.

#5. Do you know who is referred to as the Old Lady of Threadneedle Street?

The nickname originated from a 1797 cartoon portraying then Prime Minister William Pitt as wooing an old lady to get his hands on her wealth. The cartoon referred to the Prime Minister’s non-stop efforts to borrow money from the Bank of England, which is located on Threadneedle Street.

#6. What does it mean when a central bank is referred to as “Hawkish”? The bank is …

On the other hand, when a central bank is talking about or cutting interest rates, it is referred to as “Dovish.”

#7. Do you know what is the First Name Club?

In November 1910, six men – Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip and Paul Warburg – met at the Jekyll Island Club, off the coast of Georgia, to write a plan to reform the nation’s banking system. The meeting and its purpose were closely guarded secrets, and participants did not admit that the meeting occurred until the 1930s. But the plan written on Jekyll Island laid a foundation for what would eventually be the Federal Reserve System.

The US Federal Reserve system had to be created in absolute secrecy, which is why its creators only referred to each other on a first name basis. In those days (1910) this was a very uncommon informality.

#8. What was the nickname of Governor Hisato Ichimada of the Bank of Japan?

Hisato Ichimada was a Japanese businessman, central banker and the 18th Governor of the Bank of Japan starting 1946. Kuroda Haruhiko became the Bank of Japan’s longest-serving governor on September 29 2021. Prior to Kuroda san, Hisato san was the longest serving central banker in Japan.

He was called the “Pope” because of his influence on the banking industry and industry in general.

#9. What does ZIRP stand for?

Zero-interest-rate policy is used to stimulate growth while keeping interest rates close to zero. The downside is that it can lead to a negative interest rate, meaning that banks would have to charge customers for keeping money in savings!