The Development of Central Banking in the World and The American and The European Central Banking with Approaches to 2008 Financial Crisis

Abstract

This study analyzes last systemic financial crisis with the framework of monetary policies of Federal Reserve Banks (FED) and European Central Bank (ECB). Central banks of advanced countries have not achieved positive results with the interest rate cut decisions. These banks have started bond purchase program from the market a huge amount of with quantitative easing policies and almost strangled money in the world markets. In this study, the results of this kind of monetary policy against the crisis have discussed. The most important matter of this study is the insight difference of FED and FCB through the measures they took towards the crisis together. While basic concerns that directed monetary policies of ECB were fluctuations in monetary markets and fear of inflation, for FED problems in real markets and unemployment were added to these concerns.