The central bank of the United Kingdom, responsible for setting monetary policy, providing financial stability, and serving as the government's bank.
The interest rate at which a nation's central bank lends money to domestic banks or the rate at which domestic banks can borrow from the central bank.
The base rate is the benchmark interest rate set by a nation's central bank, influencing the rates commercial banks charge borrowers and pay to depositors.
A central bank provides financial and banking services for the government of a country and its commercial banking system, while also implementing the government's monetary policy.
A dirty float, also known as a managed float system, is an exchange rate system where the value of a currency is determined by supply and demand factors in the foreign exchange market, but where the government or central bank occasionally intervenes to stabilize or manage the currency.
The Federal Reserve System (Fed) is the central banking system of the United States, created by the Federal Reserve Act of 1913. It regulates the nation's monetary policy, oversees the cost and supply of money, and supervises international banking through agreements with other central banks.
Inflation targeting is a monetary policy strategy where a central bank sets an explicit target rate for inflation and uses tools such as interest rate adjustments to achieve this target. This policy was first adopted by New Zealand in 1990 and has since been implemented by over 50 countries, including the UK and a more flexible approach by the USA.
A liquidity trap is an economic situation where adding liquidity through increased money supply and lowered interest rates fails to stimulate borrowing, lending, consumption, and investment. It can sometimes be escaped through fiscal policy or distributing money directly to people.
The monetary base is the most narrow definition of the money supply, equal to the amount of currency in circulation plus the reserves held by commercial banks at the central bank. In monetary terminology, it is designated as M0.
Quantitative easing (QE) is a form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market to increase the money supply and encourage lending and investment.
Reserve assets are financial instruments that a central bank or a government holds to implement monetary policy and ensure financial stability. These assets are crucial for maintaining liquidity, managing exchange rates, and backing up domestic currency.
Transfer credit risk refers to the risk faced by a creditor, often in long-term contracts, due to a foreign debtor's inability to obtain foreign currency from the central bank despite being able and willing to pay. It is an aspect of international credit exposure.
