Finance >> Banking >> Bank of England

Bank of England

The Governor and Company Bank of England, popularly known as the Bank of England, was founded back in 1694 and is the Central Bank of the United Kingdom. The bank is owned by the State of England and regulates all the monetary policies of the country. In fact, it is the only authority that can print and circulate bank notes in England and Wales. The Scottish and the Northern Irish banks do get to print their own bank notes but only on getting backed one to one with every pound printed by the Bank of England. The Bank of England operates from its headquarters in the main financial district of London, the City of London on Threadneedle Street. It is therefore at times referred to as the Old Lady of the Threadneedle Street.

The Bank of England acts as the bank of the Government and maintains the Consolidated Funds Account besides keeping a check on the gold reserves and the foreign currencies. It works towards stabilizing the monetary and fiscal situations in the UK with the help of institutions like the HM Treasury (the part of the government in charge of the financial and economic policies), the Financial Services Authority (which is an autonomous body regulating the financial industry) and other central banks that aim at the betterment of the international financial situation.

The most important function of the Bank of England is to stabilize the prices and keep inflation under control. This of course is done through monetary policies and means that the bank has to keep confidence in the currency of England i.e. the pound and keeping the prices under control. For the current fiscal year, even with the American economy going in to a depression, the inflation rate has been targeted at 2%, which is indeed praiseworthy.

The monetary authority of the Bank of England sets the official interest rate since 1997 but the operational ability of management of debt has been transferred to the UK Debt Management Office post 1998. The Bank of England was also responsible for checking the functions and business affairs of the commercial banks till June 1998. However, with the number of such banks increasing, the responsibility was transferred to the Financial Services Authority. The cash management of the government has also been taken up by the UK Debt Management Office from the Bank of England in the year 2000.

The Bank of England, as a friend of the nation, tries to take a broad view of the problems it faces and work it does. This is mainly done through regular publication of its statistical reports every quarter and speeches by eminent figures in the Bank. To feed the curiosity of the people of England, the bank also maintains a free museum, showing a whole exhibition on the inflation figures through the years and how Bank of England has bee tacking the scenario. It also a competition for the A level students called the Target Two Point Zero.