Central banks across the world were established for different reasons; the Bank of England got its charter in 1694 in return for promises to fund the government; the Fed was set up in 1913 to prevent the kind of financial instability the U.S. experienced after the failure of the Knickerbocker Trust. But the primary role of a modern central bank has shifted towards stabilizing the value of the domestic currency by keeping price increases, that is, inflation, at a low level: around 2% in the case of the Fed.