Securities are financial assets that can be traded. Common examples include shares (ownership in a company), bonds, and debentures (debt obligations).

In the context of central banking, these assets are used to manage the economy through open market operations:

• When a central bank purchases securities, it adds liquidity (money) into the market to encourage spending and lower interest rates.
• When a central bank sells securities, it removes money from the economy to reduce the money supply and slow down spending.