Central bank loan
A central bank loan is the set of instruments with which a central bank (central bank) operates the associated economy or whose banking system provides the necessary money.
The total of the central bank credit recorded at the central bank corresponds to the central bank money supply . As the price for the central bank loan, the commercial banks pay the central bank the key interest rate . You use it to procure your cash holdings, but also other bank money items. This entire aggregate is provided by the central bank z. B. controlled with the help of the key interest rate (adapted to the needs of the economy). In order for the commercial banks to adapt their credit creation to the requirements of this monetary policy , a certain minimum ratio between central bank money and total credit sum is stipulated in their balance sheet by statutory regulations. If this is not reached, a central bank loan must be taken out at the current key interest rate. Incidentally, central bank credit - to the state - is also granted with open market policy .
See also
literature
Jörn Altmann: Workbook Economics / Economic Policy , 1993