ADVANCED GROUP TASK. CENTRAL BANK.

We are going to talk about Finance, so read the following information and do the tasks, 

CENTRAL BANKS.

A central bank is responsible for its country's financial affairs and monitary system. Each central bank may have various specific tasks, nevertheless they can be said to have the same main objectives:

• to oversee monitary policy
• to maintain price stability by controlling inflation
• to manage the production and distribution of the nation's currency (issue of banknotes and coins)
• to support the nation in times of crisis to prevent its banking system from failing (providing funds to a country's economy when commercial banks cannot cover a shortage)
• to manage interest rates
• to serve as a banker for other banks

It is generally believed that a central bank can carry out these functions if it remains independent from, and uninfluenced by any political regime.

MAKE SURE THAT YOU:

- are well-informed about some of the main objectives of central banks
- understand and, which is more important, can use the highlighted words and phrases.

THE EUROPEAN CENTRAL BANK (the ECB)

Unlike other central banks, the Eiropean Central Bank, situated in Frankfurt, is not responsible for the banking and financial matters of a single nation, but rather a group of nations. hen the first eleven EU members states- and six others - adopted the Euro as their single currency, they no longer had monitary sovereignity. However each maintained its own central  bank and together these now comprise the Eurosystem togetherwith the ECB.
According to EU treaty, the basic tasks of the Eurosystem are, among others:

• to maintain price stability
• to define and implement monitary policy
• to conduct foreign exchange operations
• to promote the smooth operation of payment systems
• to manage foreign reserves of the Eurozone countries

Now let's watch two videos about the ECB.

You are supposed to watch the video ABOUT THE ECB and take notes for further preliminary discussion. 

For the key grounded discussion watch the video ROLE AND TASKS in order to be ready to answer the following questions:

• What is the gold standard and when was it used?
• Why did central banks have to keep sufficient gold reserves?
• What does the value of money derive from today?
• Who forms the Governing Council of the ECB?
• Who owns ECB shares and how are they attributed?
• Which of these roles of the ECB is NOT mentined?

- defining monitary policy
- issuing banknotes
-keeping inflation under 2%
- managing foreign reserves

Be prepared to talk over the questions the coming Saturday.

Remember that your previous task was to know the vocabulary (p. 76-78). And you are expected to practice the vocabulary in the frame of the exercises:

p. 77 - A

p. 78 - A, B  

Follow-up. 

DO you know that the first Euro banknotes were introduced in January 2002? Want to know more about it? 

If yes, watch the rest of the videos using the same link! 

Good luck in everything and have a productive week!