Professional Documents
Culture Documents
England
Blu Cristina-Carmen
Contents
Introduction
History
Functions
of the Bank
Monetary stability
Financial stability
Banknote issues
The vault
Governance of the Bank of England
Governors
Conclusion
Bibliography
Introduction
The
Bank of England is the central bank of the United Kingdom and the model
on which most modern central banks have been based. Established in 1694, it is
the second oldest central bank in the world, after the Sveriges Riksbank, and
the world's 8th oldest bank.
It
was established to act as the English Government's banker, and is still the
banker for the Government of the United Kingdom. The Bank was privately
owned by stockholders from its foundation in 1694 until nationalised in 1946.
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The
Bank's Financial Policy Committee held its first meeting in June 2011 as a
macro prudential regulator to oversee regulation of the UK's financial sector.
The
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History
The right operation was renewed by Parliament in 1709, when the bank and
ensure dominance in the issue of banknotes, because in 1715 the bank will
get the monopoly issue of banknotes in London.
The Bank's roles and functions have evolved and changed over its threehundred year history. Since its foundation, it has been the Government's
banker and, since the late 18th century, it has been banker to the banking
system more generally - the bankers' bank. As well as providing banking
services to its customers, the Bank of England manages the UK's foreign
exchange and gold reserves.
The Bank has two core purposes - monetary stability and financial stability. The
Bank is perhaps most visible to the general public through its banknotes and,
more recently, its interest rate decisions.
The Bank has had a monopoly on the issue of banknotes in England and
Wales since the early 20th century. But it is only since1997 that the Bank has
had statutory responsibility for setting the UK's official interest rate.
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Financial
Monetary stability
stability
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The Bank used to be responsible for the regulation and supervision of the banking and
insurance industries, although this responsibility was transferred to the Financial Services
Authority in June 1998. After the financial crises in 2008 new banking legislation
transferred the responsibility for regulation and supervision of the banking and insurance
industries back to the Bank.
In 2011 the interim Financial Policy Committee (FPC) was created as a mirror committee
to the MPC to spearhead the Bank's new mandate on financial stability. The FPC is
responsible for macro prudential regulation of all UK banks and insurance companies.
To help maintain economic stability, the Bank attempts to broaden understanding of its
role, both through regular speeches and publications by senior Bank figures, a
semiannual Financial Stability Report,and through a wider education strategy aimed at
the general public. It maintains a free museum and runs the Target Two Point
Zero competition for A-level students.
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Banknote issues
The Bank has issued banknotes since 1694. Notes were originally hand-written;
although they were partially printed from 1725 onwards, cashiers still had to
sign each note and make them payable to someone. Notes were fully printed
from 1855.
Until 1928 all notes were "White Notes", printed in black and with a blank
reverse. In the 18th and 19th centuries White Notes were issued in 1 and 2
denominations. During the 20th century White Notes were issued in
denominations between 5 and 1000.
Until the mid-nineteenth century, commercial banks were able to issue their
own banknotes, and notes issued by provincial banking companies were
commonly in circulation.
The Bank Charter Act 1844 began the process of restricting note issue to the
Bank; new banks were prohibited from issuing their own banknotes and
existing note-issuing banks were not permitted to expand their issue.
As provincial banking companies merged to form larger banks, they lost their
right to issue notes, and the English private banknote eventually disappeared,
leaving the Bank with a monopoly of note issue in England and Wales.
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At the start of the First World War, the Currency and Bank
Notes Act 1914 was passed, which granted temporary
powers to HM Treasury for issuing banknotes to the value of
1 and 10/- (ten shillings)
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Treasury notes had full legal tender status and were not convertible for
gold through the Bank, replacing the gold coin in circulation to prevent
a run on sterling and to enable raw material purchases for armament
production.
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Treasury notes were issued until 1928, when the Currency and Bank Notes Act
1928 returned note-issuing powers to the banks.The Bank of England issued
notes for ten shillings and one pound for the first time on 22 November 1928.
During the Second World War the German Operation Bernhard attempted to
counterfeit denominations between 5 and 50 producing 500,000 notes
each month in 1943.
In 2006, over 53 million in banknotes belonging to the bank was stolen from a
depot in Tonbridge, Kent.
Modern banknotes are printed by contract with De La Rue Currency in
Loughton, Essex.
The vault
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The Bank is custodian to the official gold reserves of the United Kingdom and many
other countries. The vault, beneath the City of London, covers a floor space greater
than that of the second-tallest building in the City, Tower 42, and needs keys that are
three feet long to open.The Bank is the 15th-largest custodian of gold reserves, holding
around 4600 tonnes.
These gold deposits were estimated in February 2012 to have a current market value
of 156,000,000,000.
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Markets
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Governance
Since the 2009 Banking Act ('the 2009 Act'), the Bank has
had a statutory objective to protect and enhance the
stability of the financial systems of the United Kingdom'
and the Court, consulting HM Treasury and on advice from
the Financial Policy Committee (FPC), determines the
Bank's strategy in relation to that objective.
Conclusion
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Bibliography
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http://www.bankofengland.co.uk/Pages/home.aspx
http://en.wikipedia.org/wiki/Bank_of_England
https://www.scribd.com/doc/165661569/Bank-of-England
http://www.moneyreformparty.org.uk/money/about_money/quotes.php