The role of central banks in protecting the integrity of the economy is crucial. In fact, this role is often considered to be key to whether or not a nation experiences extreme financial shifts, such as severe recessions or periods of inflation and how long those adverse situations continue. For this reason, it should come as no surprise that a number of central banks around the world choose to be actively engaged with what is happening in their domestic markets and to some degree what is happening in the world market.

The Central Bank of India is a good example of being active in the market, even though it is usually classed more as a commercial bank that happens to be government owned. In practice, the distinction does mean that some of the functions managed by central banks in other countries are in fact handled by government departments and agencies. This particular financial institution actively functions within the marketplace by setting standards that competitors must live up to or fail to capture market share. For example, the cashcard program of the bank is particularly aggressive, as is its benefit package offered to nationals of India who are residing in other nations.

The European Central Bank has the ability to impact market activity directly in all the member states associated with the European Union, with each of the states represented by a governor or other official. This in turn creates a situation in which the ability to print currency, limit interest rates and perform other financial functions that help to keep the economy in check is tremendous. The emphasis on price stability within all the nations associated with the union has sometimes been criticised and at other times praised, depending on what effect its efforts eventually produce.

The People’s Bank of China serves as the means of controlling monetary policy within the People’s Republic of China as well as providing a strong basis for the regulation of financial institutions within the country. The degree of influence on the marketplace in China has been credited with allowing the nation to experience less economic distress even as other nations were going through several financial reverses during the 2007-2009 period, making it arguably one of the more influential and stable of all central bank organisations.

In the US, the Federal Reserve serves as the central bank authority, with the ability to order the printing of money, set interest rates and exert a great deal of control over the movement of the economy within the country. With a network of reserve banks scattered throughout the country, the reserve has at times stepped in to provide additional financing to certain industries in order to slow a negative trend within the economy, essentially helping to stabilise the marketplace. Like most central banks, the reserve has been both praised and criticised for its efforts.

Many central banks interline through a number of working agreements as well as co-operation through the Bank for International Settlements, located in Switzerland, providing central bank style services and support to the participating central banks. These alliances help make it possible to identify ways to minimise the impact of adverse market conditions in some parts of the world and reduce the potential for those situations to have significant repercussions across the globe.