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October 4, 2013

Historical Echoes: A Central Bank by Any Other Name Is Still . . .

Amy Farber

Perhaps you enjoy being read to out loud. Perhaps you enjoy
being read to on subjects related to central banking. Perhaps you would enjoy
being read the Wikipedia entries for central banks around the world. If so, and
your reader was to read the following beginning sentences for central bank entries, you would hear:

The central bank of Trinidad and Tobago is the central
bank of Trinidad and Tobago . . . . The central bank of Yemen is the central bank of
Yemen . . . . The central bank of The Bahamas is the central bank of The Bahamas . . . . The
central bank of Jordan is the central bank of Jordan . . .


    
You would not hear the capitalization of the central bank
names. But in Wikipedia, the first sentence is actually recorded as: The
Central Bank of Trinidad and Tobago is the central bank of Trinidad and Tobago. The central bank sentences
are a bit like the following, although they are much easier to prove (as far as
we know, the institutions in the examples do not exist):

The Safest Bank in New England is the
safest bank in New England.

The Only Bank That Serves Zombies is the only bank that serves zombies.

    
Are central bank entries the only places in Wikipedia where
this seeming meaninglessness occurs? Please let us know if you discover
otherwise. These entries for central banks, however, are the exception rather
than the rule in Wikipedia. Very often the name of the central bank is not in
the form “The Central Bank of X,” but rather “The Reserve Bank of X” or “The Monetary Authority of X.” Then, when the English translation of the central bank name is of the form “The Central Bank of X,” there is usually a qualifying phrase
displaying the name in the language of that country, such as “The Central Bank of Bolivia” (Spanish: Banco Central de
Bolivia) is the central bank of Bolivia.

    
The Bank for International
Settlements has a complete
list
of the world’s central banks
with links to the banks’ websites. Central bank web sites usually have a
“History” section which may or may not explain the wherefore of that particular
central bank name. This interactive
map
of central banks of unclear
origin calls all the banks “Central Bank of X” (even calling the Federal
Reserve the “Central Bank of the United States”), but it links to the banks’
web sites where you can see the official names.

    
The Wikipedia
entry for “Central bank” gives a concise accounting of different name forms for central
banks. (It’s also interesting to contrast it with the entry for “National bank.”) The origin of the text is unattributed in Wikipedia and,
therefore, is mysterious. At least three
other sources (findable on Google books or purchasable from Amazon.com) contain
essentially the same two paragraphs, as well as do a large number of websites of
unknown repute. Here is the text:

There is no
standard terminology for the name of a central bank, but many countries use the
“Bank of Country” form (for example: Bank of England, Bank of Canada,
Bank of Mexico). Some are styled “national” banks, such as the
National Bank of Ukraine, although the term national bank is also used for
private commercial banks in some countries. In other cases, central banks may
incorporate the word “Central” (for example, European Central Bank,
Central Bank of Ireland, Central Bank of Brazil); but the Central Bank of India
is a (government-owned) commercial bank and not a central bank. The word
“Reserve” is also often included, such as the Reserve Bank of India,
Reserve Bank of Australia, Reserve Bank of New Zealand, the South African
Reserve Bank, and U.S. Federal Reserve System. Other central banks are known as
monetary authorities such as the Monetary Authority of Singapore, Maldives
Monetary Authority, and Cayman Islands Monetary Authority. Many countries have
state-owned banks or other quasi-government entities that have entirely
separate functions, such as financing imports and exports.

In some countries, particularly in some Communist countries, the term national bank may be used to indicate both the monetary authority and the leading banking entity,
such as the Soviet Union’s Gosbank (state bank). In other countries, the term
national bank may be used to indicate that the central bank’s goals are broader
than monetary stability, such as full employment, industrial development, or
other goals.

    
Names to do with central banking
do change. A historical example is the name change from the “Federal Reserve Board”
to “The Board of Governors of the Federal Reserve System” legislated in the Banking
Act of 1935
. Notwithstanding the importance
of the act
, it was not such a big name
change. After all, the Federal Reserve System is the Federal Reserve System.

Disclaimer
The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.


Amy Farber is a research librarian in the Federal Reserve
Bank of New York’s Research and Statistics Group.

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