Central banks' main role in modern economies is controlling inflation through adjustments in short-term interest rates to contol the money supply as sole official issuer of government bonds and printer of national currency. Central banks also usually regulate the banking and finance sector of national economies and are often considered the 'lenders of last resort' in a banking crisis.
The U.S. Federal Reserve (the Fed) and the E.U.'s European Central Bank (ECB) are the largest of the world's 151 central banks and amongst the most independent. Independent central banks have become increasingly important to national economies since they now (in theory) make crucial decisions on key issues like interest rates and inflation free of political intereference or concerns. However, some commentators have pointed out that recent actions by the Fed, particularly over the Bear Stearns bailout, have undermined its own political independence and may have encouraged some U.S. politicians to emulate French President Nicholas Sarkozy's efforts seize back some of the ECB's independence.
The Swiss National Bank in July 2008 joined the Fed and the ECB in extending access to emergency loans and other 'expanded liquidity programs' to investment banks hit by credit market meltdowns like the U.S. mortgage-backed securities collapse. The Fed extended its Primary Dealer Credit Facility for investment banks from September 2008 until January 2009, while the ECB and SNB added U.S. dollar auctions with 84-day terms to alternate bi-weekly with those banks' 84-day term auctions.
It was suggested in March 2011 that some central banks, particularly the U.S. Federal Reserve, were at risk of keeping interest rates too low for too long. The European Central Bank President Jean-Claude Trichet said in response that the global central banks were ready to do whatever it takes to avert a sustained increase in inflation expectations.