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It performs all the recognized functions of a central bank -- to maintain price stability, and subject to that, to support the economic policy of Her Majesty's Government ( Bank of England Act 1998 ). It has a monopoly on the issue of banknotes in England and Wales (see Sterling); it is both the Government's banker and the bankers' bank; a "Lender of Last Resort"; it manages the country's foreign exchange and gold reserve s and the Government's stock register; it used to be responsible for the regulation and supervision of the banking industry (see Johnson Matthey , BCCI, and Barings), although this responsibility was transferred to the Financial Services AuthorityThe United Kingdom Financial Services Authority (FSA) is an independent non-governmental body that regulates the UK financial services industry. The FSA was created by the UK chancellor of the exchequer on May 20, 1997, and given statutory powers on Decem in June 19981998 was a common year starting on Thursday (see link for calendar), and was designated the International Year of the Ocean''. Events January January 1998 A massive ice storm, caused by El Nino, strikes New England, southern Ontario and Quebec, resulting. Since 19971997 was a common year starting on Wednesday (see link for calendar), and was designated the International Year of the Reef''. Events January January 3 NBC's Today Show Bryant Gumbel signs off for the last time January 8 Mister Rogers receives a star on t the Monetary Policy Committee has had the responsibility for setting the official interest rateAn interest rate is the 'rental' price of money. When a resource or asset is borrowed, the borrower pays the lender for the use of it. The interest rate is the price paid for the use of money for a period of time. One type of interest rate is the yield on. ScottishScotland or in Scottish Gaelic, Alba is a country and former independent kingdom of northwest Europe, and one of the four nations comprising the United Kingdom. Scotland occupies the northern third of the island of Great Britain. Scotland took part in a p and Northern IrishNorthern Ireland is the smallest of the Home Nations of the United Kingdom of Great Britain and Northern Ireland. Northern Ireland lies in the north-east of the island of Ireland. It covers 14,139 square kilometres (5,459 square miles), and has a populati banks retain the right to issue their own banknotes, but they must be backed one to one with deposits in the Bank of England, excepting a few million pounds representing the value of notes they had in circulation in 1845Events January 29 The Raven by Edgar Allan Poe is published for the first time New York Evening Mirror . March 1 President John Tyler signs a bill authorizing the United States to annex the Republic of Texas. March 3 Florida is admitted as the 27th U.. It maintains the Government's Consolidated FundThe Consolidated Fund is the British government's central bank account, held at the Bank of England. Several Consolidated Fund Acts are passed by Parliament during each session allowing the government to draw money from the fund to finance public services account.
The current Governor of the Bank of England is Sir Mervyn Allister King, who took over on June 30 2003 from Sir Edward George.
The bank was founded along with the Bank of Scotland by William Paterson in 1694 to act as the English Government's banker; the Bank of Scotland was to be the Scottish Government's banker. He proposed a loan of £1.2m to the Government; in return the subscribers would be incorporated as the Governor and Company of the Bank of England with banking privileges including the issue of notes. The Royal Charter was granted on July 27, 1694. Public finances were in so dire a condition at the time that the terms of the loan were that it was to be serviced at a rate of 8% per annum, and there was also a service charge of £4000 per annum for the management of the loan. The first governor was Sir John Houblon, who is depicted in the £50 note issued in 1994. The charter was renewed in 1742, 1764, and 1781. In 1734 the Bank moved to its current location on Threadneedle Street, slowly acquiring the land to create the edifice seen today.
When the idea and reality of the National Debt came about during the 18th century this was also managed by the bank. By the charter renewal in 1781 it was also the bankers' bank - keeping enough gold to pay its notes on demand until February 26, 1797 when war had so diminished gold reserves that the Government prohibited the Bank from paying out in gold. This lasted until 1821.
The 1844 Bank Charter Act tied the issue of notes to the gold reserves and gave the bank sole rights with regard to the issue of banknotes. Private banks which had previously had that right retained it, provided that their headquarters were outside London and that they deposited security against the notes that they issued. A few English banks continued to issue their own notes until the last of them was taken over in the 1930s. The Scottish and Northern Irish private banks still have that right. Britain remained on the gold standard until 1931 when the gold and foreign exchange reserves were transferred to the Treasury. But their management was still handled by the Bank. In 1870 the Bank was given responsibility for interest rate policy.
During the governorship of Montagu Norman, which lasted from 1920 to 1944, the Bank made deliberate efforts to move away from commercial banking and become a central bank. In 1946, shortly after the end of Norman's tenure, the Bank was nationalised.
The nearest London Underground station, and thus a busy commuter stop, is Bank station.
In 1997 the bank's Monetary Policy Committee was given sole responsibility for setting interest rates to meet the Government's stated inflation target of 2.5%. This decision was taken by the Chancellor of the Exchequer, Gordon Brown immediately following the 1997 general election. However the idea was originally that of Conservative MP Nicholas Budgen who proposed it as a Private Members Bill in 1996, the bill failed as it had neither the support of the government or the opposition. The act of 1997 is almost verbatim what Budgen proposed in 1996. Should inflation miss the target by over 1%, the governor would have write a letter to the Chancellor of the Exchequer explaining why and how he would remedy the situation. This was an astute move for several reasons;
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