History of the Central Bank – A chronology of main developments 1943 - 2003
The Early Years and Consolidation: 1943-1964
1943 1 February
Currency Commission dissolved. The Central Bank of Ireland is established with particular powers and functions, the most important of which is “safeguarding the integrity of the currency” and, echoing a phrase from Article 45 of the State’s Constitution, ensuring that “in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole.” [Central Bank Act, 1942, (No. 22 of 1942), Section 6(1)]. However, certain functions regarded in other countries as characteristic of central banks were not assigned to the Central Bank: •
It did not acquire custody of the cash reserves of the commercial bank.
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The Bank of Ireland retained its position as banker to the government.
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The new institution had no statutory power to restrict credit, though it could promote its expansion (the conditions for influencing credit by open-market operation did not exist).
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Ireland’s external monetary reserves continued to be held largely in the form of the external assets of the Associated (i.e., clearing) Banks –