Defining “Central Banks”: Four Criteria

Steffen Elkiær Andersen

Chapter 2 in The Origins and Nature of Scandinavian Central Banking, 2016, pp 11-22 from Palgrave Macmillan

Abstract: Abstract Virtually all of today’s central banks in the Western world have been founded by special royal charters or direct legislation. That does not by itself make them “central banks”. Those charters were issued long before the concept of “central banking” was born. Originally, they were just commercial banks endowed with special privileges laid down in their charters or the legislation. Their charters had been given because of special circumstances at the time they were granted, but they were still just commercial banks with ordinary shareholders expecting a profit. In some cases charters were granted in return for favours given to the king/government (war financing). That was not the case in Scandinavia. In all cases, however, their charters gave the respective banks a more or less special status, from which they gradually developed into central banks. They steadily fulfilled the four criteria discussed below. Eventually, some of them became so immersed in government business and politics that they became more of a department of the country’s ministry of finance than a central bank. In 1946–49, some of them were nationalized (e.g., the Bank of England, the Banque de France, and Norges Bank).

Keywords: Monetary Policy; Central Bank; Current Account; Commercial Bank; European Central Bank (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-39750-4_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9783319397504

DOI: 10.1007/978-3-319-39750-4_2

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().