When interest rates need to be changed up or down by a bank, who has the authority to make those changes?
What sort of oversight is there?
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OldBrit · 61-69, M
Essentially a commercial decision taken by whoever is appointed by the company.
There's no real oversight, the market will determine.
Unless you mean central bank rates. They're different country to country. But in UK the bank of England sets them via a committee of members and the minutes of the meetings, are public as is the individual votes. Majority vote is the rule.
It used to be set by the treasury years ago but then it was made independent. They now use it to try to peg inflation at 2%. Inflation rises so do rates to take money out of the economy via higher repayments thus dampening demand therefore lowering inflation. Or so the theory goes. I'm no econmist but I don't think its anywhere near as simple as thet portray it.
There's no real oversight, the market will determine.
Unless you mean central bank rates. They're different country to country. But in UK the bank of England sets them via a committee of members and the minutes of the meetings, are public as is the individual votes. Majority vote is the rule.
It used to be set by the treasury years ago but then it was made independent. They now use it to try to peg inflation at 2%. Inflation rises so do rates to take money out of the economy via higher repayments thus dampening demand therefore lowering inflation. Or so the theory goes. I'm no econmist but I don't think its anywhere near as simple as thet portray it.
newjaninev2 · 56-60, F
@OldBrit In New Zealand we use the Reserve Bank to set the official cash rate, and the governor of the Reserve Bank acts independently in accordance with the Reserve Bank Act, which defines the mechanisms available and sets a target of 1.5 - 2% for inflation.
Until recently the americans used the same sort of system, but Donald Trump has now decided that he will set and control the central bank rates and well as reporting on the economic situation.
Until recently the americans used the same sort of system, but Donald Trump has now decided that he will set and control the central bank rates and well as reporting on the economic situation.