Central Banks Between Classicism and Modernity

Abstract

Since the establishment of the first Central Bank in the seventeenth century, Central Banks managed to play an important role in the national economies by conducting their classic functions: the issuance of currency and the discount one, With the passage of time and with the extraordinary development of the global economy (especially in the twentieth century), central banks have been in a position to increasingly support the financial and economic environment and to control the entire national banking system, by defending their modern functions which joined to the classical ones. Perhaps the most important modern function is the application of monetary policy which aims at price stability, high employment rate, economic growth, stable financial markets, etc. Definitely, adding these modern functions to the classic ones has positively influenced the national economies in most cases, and their future role will be increasingly important given the current world economy context. Excepting the banknotes printing and national coins minting, a National Bank needs to keep safe banknotes or coins that are not into circulation and destruct them when necessary. The classical functions that rise from these actions are the distribution of issued currency and cash reserves management. Normally, the currency is issued in accordance with economic development: industrial production, agriculture, trade, services, etc. With the modernization of national economies, central banks started to have, in addition to classical functions, other new modern functions. Further, in this paper the authors aim to describe some of them and will present the role of services adaptation to current economy conditions.