How central bank controls commercial banks - SS2 Commerce Past Questions and Answers - page 1
How do central banks control commercial banks?
By providing loans to commercial banks
By setting regulatory rules and guidelines
By controlling the stock market
What is the role of central banks in licensing commercial banks?
Granting licenses to commercial banks
Managing customer deposits
Managing customer deposits
What are reserve requirements set by central banks?
Guidelines for commercial banks to expand their branch networks
Regulations for commercial banks to reduce interest rates
Rules for commercial banks to maintain a certain percentage of deposits as reserves
What is the purpose of a central bank acting as a lender of last resort?
To control inflation
To provide emergency funds to commercial banks
To regulate stock market activities
What do clearing systems established by central banks facilitate?
The transfer of funds between commercial banks
The buying and selling of government bonds
The management of public debt
Explain one way in which central banks control commercial banks.
What is the role of central banks as the lender of last resort?