INTRODUCTION AND BACKGROUND
1.1.0 Central bank Background
Central banks have emerged over the past four centuries when mankind moved from a system of gold or silver backed currencies to private issuers to fiat money. The first central bank in the world was the Swedish Riksbank, founded in 1668.
Song Dynasty introduced the paper currency in economy and which Yuan Dynasty used notes as a medium of exchange as compared to gold and silver, but Ming Dynasty closed to use the paper money due to which much of the Chinese business shut down.
Due to on this behalf first public bank introduced in 1609 in the name of Bank of Amsterdam which introduced the concept of account opening (not directly converted into coins). The bank motivates government in the public interest and floating of economic beneficiary of the country. Sweden government developed an organization in the name of Sverigeas Ricks Bank. In 1664 this institution directly lends money to the government and help out to the government financial policy. The Bank of England (1690) started their work on the behalf of public interest to provide short term finance but failed to organize 1.2 Million euro. For the government of England within the France conflict to the word wide every country have a central bank which regulate the financial policies of the country under the regulation of the government.
During 19th and 20th century Japan and European countries started gold as an international standard for exchange but today every central bank used fait money in the medium of exchange during within the countries. Central bank works with the cooperation of government and regulates the banking sector to minimize the downfall and collusion process of the financial institutions.
In the beginning different thoughts used the name of the bank with different styles. Communists use their name as National Bank and other thinkers use their name as Country Bank but in modern era it’s specifically called central bank or
References: www.psl.com “retrieved on April. 14, 2014 at 12:09am” www.wikipedia.com “retrieved on April wikipedia.org/wiki/Bank “retrieved on April. 20, 2014 at 10:16pm”