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Securities & Trading Technology
Central banks and their functions
August 23, 2021
A Central Securities Depository specialize in holding shares and other securities. These work as a part of the
central banking system where the investors and depositors hold their securities. Modern-day banking systems
involve the use of electronic systems for easy exchange. Many major Central Banks involve the use of
management systems for easy management of securities. There are several advantages of a good bank
management system in managing the working of the banking system. A few of the functionalities of the central
banking system are discussed below: -
Central banks are very important these days because they are involved in issuing notes and currency across
the countries. They are given the monopoly to issue the notes because the system aims at maintaining
uniformity, elasticity, supervision, and better control. These banks are responsible for the total money supply
in the economy of the country.
Central banks also work as advisors, agents, and bankers to the government. They receive payments and
make so on behalf of the government. The central bank also □oats the public loans and manages them
accordingly on behalf of government authorities. The central bank also holds the receipts and keeps the
check on accounts and balances of the government of their respective countries.
The major and minor commercial banks deposit some of the cash within the central banks as custodies.
These commercial banks withdraw money during the busy season and pay them back during slack seasons.
Central banks are responsible for securing the stability of the exchange rate when the country is in the gold
standard. Post-World-War-II, the central banks of many countries are keeping the gold and foreign currencies.
Thus, it is obvious that the Central banks are very vital for the economic functioning of the country. A good Central
Bank Management Sys