How Banks Create Money and Central Banks Steer the Economy
Money is the foundation of every economy, and banks are the institutions that keep it moving. Commercial banks take deposits, make loans and process payments, creating new money every time they lend to households and businesses. Central banks sit above the system, setting interest rates, guiding monetary policy and acting as lender of last resort to protect financial stability. Their decisions affect borrowing costs, inflation and asset prices for everyone.
The Federal Reserve and monetary policy are covered in our SIE Examination Preparation course. Build this knowledge here, and show employers your growing finance expertise through your FRC Video Resume.
