A bankers’ bank and lender of last resort. All developed and most developing countries have a central bank that is the instrument of the government’s function or controlling the credit system. Central banks, such as the Bank of France, the Federal Reserve Bank and the Bank of Canada, control the note issue, act as the government’s bank, accept deposits from and make loans to the commercial banks and the money market, lead the interest rate structure through··establishing the rate at which loans of last resort will be made, and conduct transfers of money and bullion with central banks in other countries.
Reference: The Penguin Dictionary of Economics, 3rd edt.
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