The biggest liability of the Central Bank System is its notes that form the nation's supply of currency.

Question

Quizplus · Accepted Answer

The biggest liability on the balance sheet of a central bank, such as the Federal Reserve in the United States, is indeed its notes in circulation, which represent the physical currency (bills and coins) held by the public and the banks. These notes are a liability because they are essentially an IOU from the central bank to the bearer, promising to pay the bearer on demand the note's face value.

The Biggest Liability of the Central Bank System Is Its