World Crisis Online

A central bank, reserve bank, or monetary authority is a banking institution granted the exclusive privilege to lend a government its currency. Like a normal commercial bank, a central bank charges interest on the loans made to borrowers, primarily the government of whichever country the bank exists for, and to other commercial banks, typically as a ‘lender of last resort’. However, a central bank is distinguished from a normal commercial bank because it has a monopoly on creating the currency of that nation, which is loaned to the government in the form of legal tender. It is a bank that can lend money to other banks in times of need. Its primary function is to provide the nation’s money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a lender of last resort to the banking sector during times of financial crisis (private banks often being integral to the national financial system). It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently. (more…)

The global financial crisis came to the forefront of the business world and world media in September 2008, with the failure and merging of a number of American financial companies. It was not a surprise — many business journals had been commenting on the stability of the leading American and European financial firms following the Sub-Prime Mortgage Crisis. Much of the American economy is built on credit with firms borrowing money from other firms and the general consumer borrowing money for homes and cars. Many people were taking advantage of the housing boom in the US when it ended, leaving both investors and mortgage companies in trouble. (more…)

PRINCETON, N.J. — The president and CEO of the Federal Reserve Bank of New York said Friday that the financial world can learn from the economic crunch of the past two years and become stronger. (more…)