The Central Bank in today's world is a critical part in an economy's role to operate efficiently and effectively. Central banks began operating in the United States in 1914. The Central Bank is commonly called the “Fed.”, and it performs various functions that have developed over the years. These functions play enormous importance in the functioning of our economy. The Central Bank The central bank is a financial institution that organizes the government's finances, controls the economy's money and credit, and serves commercial banks as a bank. The role of central banks is to create money and develop monetary policies. Monetary policy can be used to provide assistance in the way an economy currently operates. Monetary policy has two effects, an expansionary policy and a restrictive policy. Expansionary policy helps lower interest rates and increase inflation in the economy; This policy improves short-term growth for the overall performance of the economy. On the other hand, a restrictive policy does the exact opposite of an expansionary one. Limited reduces growth and inflation in the economy. Another role of central banks is to manage the payments system through interbank payments. This role of central banks provides loans during times when the economy is not operating at its maximum financial capacity. Finally, the central bank supervises commercial banks, where central banks ensure that the financial system gives citizens confidence in its soundness. The goals of central banks are to ensure low and stable inflation, high economic growth, stable financial markets, stable interest rates and stable exchange rates. Objectives of Central BanksInflation in an economy is much more desirable when it is low.... .. middle of paper ......ConclusionCentral banking is extremely important for an economy to function properly. There are many roles that central banks must play to stabilize the economy. However, stabilizing the economy through fulfilling roles may not be enough. Sometimes other central banks are needed to improve overall performance. As stated in the article: Further Russian incursions would damage Ukraine's economy: central bank. Central banks today are a complex structure with various functions that operates as the "heart" of the economy. Works Cited Yukhananov, A. (2014, 4 13). Reuters. Retrieved from Reuters: http://www.reuters.com/article/2014/04/13/us-ukraine-crisis-cenbank-idUSBREA3C0P520140413Zeng, M. (2014, 3 20). The Wall Street Journal. Retrieved from the Wall Street Journal: http://online.wsj.com/news/articles/SB10001424052702304026304579451800791002312