When the zero-lower-bound problem occurs, central banks can rely on the liquidity provision.
The central bank, reserve bank, or monetary authority is the body that controls the currency and monetary policy of a state or formal monetary union and oversees its commercial banking system. Unlike commercial banks, central banks have a monopoly on the growth of the monetary base.
A central bank is a public institution that controls the currency of a country or group of countries and controls the money supply (literally the amount of money in circulation). The main goal of many central banks is price stability.
Central banks have several ways of controlling monetary policy, but the three most basic and widely used tools are short-term targeting interest rates, open market operations, and capital requirements.
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