Evolution of central bank

Abstract

Introduction. Throughout the centuries there took place a process of central banks’ development that reflected on the area of target defining, establishing the relationship with government, interconnection with financial market participants, inner management processes. This institute’s evolution from the first bank of issue creation till the modern central bank, including the supranational central bank in the European Union, is characterized by complicated tools of the change of policy, practice, institutional structure, aims and status. Nowadays the next stage of central banks’ development occurs and is characterized by expanding the mandate, reforming the policy, developing innovative aims. This stage is outlined with the global financial and economic crisis and the post-crisis period of the world financial system’s recovery. Under these circumstances, the central banks’ role tends to increase in terms of overcoming the consequences on the global financial and economic crisis that prompts actualizing the issues of integration of unconventional measures in the monetary policy tool, coordination of work of central bank and government concerning debt management, cooperation between the central bank and international financial institutions within the framework of debt management, cooperation between the central banks and international financial institutions within the framework of banking management.

Purpose. Generalization of stages and systematization of the causes of emergence, formation and development of a central bank institution through the study of their creation’s evolution and functions’ transformation.

Method (methodology). In order to investigate the historical processes, logical sequence of central banks’ development both historical and logical methods of scientific researches were applied.

Results. The reasons of central banks’ emergence were generalized, the evolution of central banks’ creation was studied, stages of emergence and development of central banks were further developed and systematized. The peculiarities of the modern stage of central banks’ functioning, role’s change and transformation of functions under the influence of global financial and economic crises.