Financial markets - recap on Central Banks

Which country's central bank is this?

• UK

• US

• China

• Argentina

What are the two key functions of a central bank?

• 1. To maintain financial stability

  2. To maintain macroeconomic stability

• 1. To maintain financial stability

  2. To maintain microeconomic stability

• 1. To maintain global stability

  2. To maintain macroeconomic stability

• 1. To meet all objectives of the country

  2. To maintain macroeconomic stability

To maintain financial stability a central bank may have to provide emergency funds, though at a price, to protect depositors and in extreme cases to prevent a systemic crisis in the financial system.

What the term used to describe this?

• Lender of first resort

• Lender of penultimate resort

• Lender of last resort

• Lender of past resort

What is the BoE's stated remit?

• To increase the money supply.

• To increase the stability of the £.

• To increase exports.

• To deliver price stability and, subject to this, to support the government’s economic objectives including those for growth and employment.

Since 1998 the DMO has issued gilts on behalf of the Treasury and in 2000 it took over responsibility for issuing Treasury bills (T-bills) and thus managing the government’s short-term cash needs.

Who is the DMO?

• Department of Management and OMOs

• Debt Management Office

• Debt and Money Supply Office

• Department of Money and Overheads

Hawks favour

• tight monetary policy

• loose monetary policy

Doves favour

• tight monetary policy

• loose monetary policy

What is the current total of the BoE's purchases of bonds via QE?

• £435bn

• £645bn

• £895bn

• £990bn