What is the role of central banks, and how has it evolved over the two centuries of their existence? Originally founded as "prince's banks", why have they increasingly taken on more general functions: issuing of money, creditor of last resort, monetary policy-maker, payment system manager, controlling authority over banking? And how can these questions be answered while taking into account the historical development of forms of money, from commodity money to checkable deposits, up to fiduciary money and "e-money"? With this urbane, elegant book, full of stimulating details, Curzio Giannini offers a consistent interpretation of the many burdens that central banks have taken on themselves. The basic thesis is that central banks are no historical accident, in that they are the end result of a progressive institutional process stemming from the features of money that distinguish it from other goods and services produced within an economic system. In other words, the actions, the duties, and even the very existence of central banks derive from their ultimate goal, i.e. supporting confidence in money. Such confidence is indispensable for maintaining its effectiveness in economic transactions over time and space and for safeguarding its very survival.

Curzio Giannini, who prematurely passed away last year, was and economist and manager at the Studies Service of the Bank of Italy (from 1983 to 1999) and then later the director of its International Relations Bureau. An original scholar of monetary theory and policy issues, he wrote many texts concerning payment systems, the evolution and functions of central banks and international monetary regimes.