Professional Documents
Culture Documents
Central Bank
Definition
• 2- Banker’s bank
1- Government’s Bank
• 2- Controller of credit
• 4- Cash reserve
• 5- Counseling services
1- Lender of last resort
• It is safe system
• It is a costly system
Proportional reserve system
• U.S 40%
• France 35%
• Germany 40%
• Russia 25%
• Pakistan 30%
• India 40%
Advantage
• It is flexible.
• Pros
• It is safe
• Risk of deflation.
• It is impracticable.
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