Central Banks’ Two-Tier Relationships

Abstract

During their long developmental history, central banks have made important changes, but their definition as both the government’s banker and the bankers’ bank is rarely questioned.¹ As explained by the BOE:

The Bank’s roles and functions have evolved and changed over its three-hundred year history. Since its foundation, it has been the Government’s banker and, since the late 18th century, it has been banker to the banking system more generally — the bankers’ bank.²