Bank of England
The Bank of England
Headquarters	Threadneedle Street, London EC3
Coordinates	51°30′51″N 0°05′19″W / 51.5141, -0.0886Coordinates: 51°30′51″N 0°05′19″W / 51.5141, -0.0886
Established	July 27, 1694
Governor	Mervyn King
Central Bank of	United Kingdom
Currency	Pound sterling
ISO 4217 Code	GBP
Base borrowing rate	5%
Website	bankofengland.co.uk
Succeeded by	Currency Commission (Republic of Ireland only)

The Governor and Company of the Bank of England (usually shortened to the Bank of England) is a state-owned institution^[1] and the central bank of the United Kingdom, that convenes the eponymous Monetary Policy Committee that is responsible for managing the monetary policy of the country. Threadneedle Street is a road in the City of London, leading from an intersection with Poultry Cornhill, King William Street and Lombard Street London ( ˈlʌndən is the capital and largest urban area in the United Kingdom. A geographic coordinate system enables every location on the Earth to be specified in three coordinates using mainly a spherical coordinate system. A geographic coordinate system enables every location on the Earth to be specified in three coordinates using mainly a spherical coordinate system. Events 1214 - Battle of Bouvines: In France, Philip II of France defeats John of England. The Governor of the Bank of England is the most senior position in the Bank of England. Mervyn Allister King (born March 30 1948) aka 'Unswerving Mervyn' is Governor of the Bank of England. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located A currency is a unit of exchange, facilitating the transfer of Goods and/or services It is one form of Money, where money is The Pound Sterling ( symbol £; ISO code: GBP) subdivided into 100 pence (singular penny) is the Currency ISO 4217 is the International standard describing three-letter codes (also known as the currency code) to define the names of currencies established A website (alternatively web site or Web site, a back-construction from the Proper noun World Wide Web) is a collection of Web pages The Currency Commission ( Coimisiún Airgid Reatha) was created by the Currency Act 1927 (Section 14 as part of the policy of the Irish Free State to create the Ireland ( Irish: Éire, ˈeːrʲə is a country in north-western Europe. Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the Public ownership of a national government A central bank, reserve bank, or monetary authority is the entity responsible for the Monetary policy of a country or of a group of member states The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The Monetary Policy Committee (MPC is a committee of the Bank of England, which meets every month to decide the official Interest rate in the United Kingdom Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, It was established in 1694 to act as the English Government's banker, and to this day it still acts as the banker for the UK Government. The Kingdom of England was a State (927-1707 located in Western Europe dating from the ninth or tenth century to the early eighteenth century when it was legally Her Majesty's Government, or when the monarch is male His Majesty's Government, is the title used by the Government of the United Kingdom, based at The Bank has a monopoly on the issue of banknotes in England and Wales. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient A banknote (often known as a bill, paper money or simply a note) is a kind of Negotiable instrument, a Promissory note made by a History The Roman occupation of Britain was the first period in which the area of present-day England and Wales was administered as a single unit (with the exception

The Bank's headquarters has been located in London's main financial district, the City of London, on Threadneedle Street, since 1734. London ( ˈlʌndən is the capital and largest urban area in the United Kingdom. For London as a whole see the main article London. The City of London is a geographically Threadneedle Street is a road in the City of London, leading from an intersection with Poultry Cornhill, King William Street and Lombard Street It is sometimes known as The Old Lady of Threadneedle Street or just The Old Lady. The Governor of the Bank of England is Mervyn King who took over on June 30, 2003 from Sir Edward George. The Governor of the Bank of England is the most senior position in the Bank of England. Events 350 - Roman usurper Nepotianus, of the Constantinian dynasty, is defeated and killed by troops of the Usurper Year 2003 ( MMIII) was a Common year starting on Wednesday of the Gregorian calendar. Edward Alan John George Baron George, GBE, PC, DL (born 16 September 1938, Surrey) known as Eddie George,

Functions of the Bank

The Bank of England performs all the functions of a central bank. The most important of these is supposed to be maintaining price stability and supporting the economic policies of the British Government, thus promoting economic growth. Her Majesty's Government, or when the monarch is male His Majesty's Government, is the title used by the Government of the United Kingdom, based at There are two main areas which are tackled by the Bank to ensure it carries out these functions efficiently:

Monetary stability

Stable prices and confidence in the currency are the two main criteria for monetary stability. A currency is a unit of exchange, facilitating the transfer of Goods and/or services It is one form of Money, where money is Stable prices are maintained by making sure price increases meet the Government's inflation target. In economics inflation or price inflation is a rise in the general level of prices of goods and services over a period of time The Bank aims to meet this target by adjusting the base interest rate, which is decided by the Monetary Policy Committee, and through its communications strategy. Interest is a fee paid on borrowed capital Assets lent include Money, Shares, Consumer goods through Hire purchase, major assets

Financial stability

Maintaining financial stability involves protecting against threats to the whole financial system. Threats are detected by the Bank's surveillance and market intelligence functions. The threats are then dealt with through financial and other operations, both at home and abroad. In exceptional circumstances, the Bank may act as the lender of last resort by extending credit when no other institution will. A lender of last resort ( LOLR) is an institution willing to extend credit when no one else will

The Bank works together with several other institutions to secure both monetary and financial stability, including:

• HM Treasury, the Government department responsible for financial and economic policy. HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing
• The Financial Services Authority, an independent body that regulates the financial services industry. The Financial Services Authority ( "FSA") is an independent non-governmental body Quasi-judicial body and a company limited by guarantee that regulates
• Other central banks and international organisations, with the aim of improving the international financial system.

The 1997 Memorandum of Understanding describes the terms under which the Bank, the Treasury and the FSA work toward the common aim of increased financial stability. A memorandum of understanding ( MOU or MoU) is a Document describing a Bilateral or multilateral Agreement between parties

The Bank of England acts as the Government's banker, and as such it maintains the Government's Consolidated Fund account. Consolidated Fund or the Consolidated Revenue Fund is the term used for the main Bank account of the government in many of the countries in the Commonwealth of It also manages the country's foreign exchange and gold reserves. The foreign exchange ( currency or forex or FX) market refers to the market for currencies. Gold reserves (or gold holdings) are held by Central banks as a Store of value. The Bank also acts as the bankers' bank, especially in its capacity as a lender of last resort, and to maintain its pragmatic experience in all aspects of banking also provides commercial and retail banking facilities to a very limited number of corporate institutions and individuals. Retail banking refers to banking in which Banking institutions execute transactions directly with consumers rather than corporations or other banks

The Bank of England has a monopoly on the issue of banknotes in England and Wales. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient A banknote (often known as a bill, paper money or simply a note) is a kind of Negotiable instrument, a Promissory note made by a Scottish and Northern Irish 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 1845. Scotland ( Gaelic: Alba) is a Country in northwest Europethat occupies the northern third of the island of Great Britain. Northern Ireland (Tuaisceart Éireann Ulster Scots: Norlin Airlann) is a Country within the United Kingdom, lying in the northeast of The Bank decided to sell its bank note printing operations to De La Rue in December 2002, under the advice of Close Brothers Corporate Finance Ltd. De La Rue plc ( is a British security printing papermaking and cash handling systems company headquartered in Basingstoke, Hampshire. ^[2]

Since 1997 the Monetary Policy Committee has had the responsibility for setting the official interest rate. The Monetary Policy Committee (MPC is a committee of the Bank of England, which meets every month to decide the official Interest rate in the United Kingdom However, with the decision to grant the Bank operational independence, responsibility for government debt management was transferred to the new UK Debt Management Office in 1998, which also took over government cash management in 2000. The UK Debt Management Office (or DMO) was established on 1 April 1998. Computershare took over as the registrar for UK Government bonds (known as gilts) from the Bank at the end of 2004. Founded in Melbourne, Australia in 1978, Computershare ( has grown (largely through overseas acquisitions to become the world's largest share registry Gilts are bonds issued by the governments of the United Kingdom, South Africa, or Ireland.

The Bank used to be responsible for the regulation and supervision of the banking industry, although this responsibility was transferred to the Financial Services Authority in June 1998. For other uses of this term see Industry (disambiguation An industry (from Latin industrius, "diligent industrious"

In order to help maintain economic stability, the Bank attempts to broaden understanding of its role, both through regular speeches and publications by senior Bank figures, 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. Target Two Point Zero is an Interest rate challenge in the UK set by the Bank of England and The Times. ^[3]

History

Tercentenary of the Bank of England, commemorated on a 1994 British two pound coin.

The main Bank of England façade, c. 1980. Year 1980 ( MCMLXXX) was a Leap year starting on Tuesday (link displays the 1980 Gregorian calendar)

Satirical cartoon protesting against the introduction of paper money, by James Gillray, 1797. James Gillray, sometimes spelled Gilray (born August 13, 1757 in Chelsea; died June 1, 1815) was a British The "Old Lady of Threadneedle St" (the Bank personified) is ravished by William Pitt the Younger. William Pitt the Younger (28 May 1759 &ndash 23 January 1806 was a British politician of the late eighteenth and early nineteenth centuries.

The bank was founded by the Scotsman William Paterson in 1694 to act as the English Government's banker. Scotland ( Gaelic: Alba) is a Country in northwest Europethat occupies the northern third of the island of Great Britain. Sir William Paterson (born April 1658 in Tinwald Dumfries and Galloway, Scotland - died in Westminster, London, on January 22, 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 long term banking privileges including the issue of notes. Only £750,000 of these funds were ever deposited with the Bank; the rest was generated by fractional reserve banking. Fractional-reserve banking is the banking practice in which Banks keep only a fraction of the value of their Bank notes and demand deposits in reserve The Royal Charter was granted on July 27 through the passage of the Tonnage Act of 1694. A Royal Charter is a Charter granted by the Sovereign on the advice of the Privy council to legitimize an incorporated body such as a city company Events 1214 - Battle of Bouvines: In France, Philip II of France defeats John of England. 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 1990. Sir John Houblon ( March 13, 1632 &ndash January 10, 1712) was the first Governor of the Bank of England from 1694 The charter was renewed in 1742, 1764, and 1781. The Bank was originally constructed above the ancient Temple of Mithras, London at Walbrook, dating to the founding of Londinium in antiquity by Roman garrisons. This article covers the history of London during the Roman period from around 47 AD when the Roman city of Londinium was founded Mithras was, among other things, considered the god of contracts, a fitting association for the Bank. The Mithraic Mysteries or Mysteries of Mithras (also Mithraism) was a Roman mystery religion which became popular among the military in the late In 1734 the Bank moved to its current location on Threadneedle Street, slowly acquiring the land to create the edifice seen today. Sir Herbert Baker's rebuilding of the Bank of England, demolishing most of Sir John Soane's earlier building was described by Pevsner as "the greatest architectural crime, in the City of London, of the twentieth century". Sir Herbert Baker ( 9 June 1862 in Cobham Kent - 4 February 1946 in Cobham Kent was a British architect Sir John Soane ( 10 September 1753 &ndash 20 January 1837) was an English Architect who specialised in the Neo-Classical Pevsner is a surname and may refer to Antoine Pevsner (1886 - 1962 a Russian sculptor Sir Nikolaus Pevsner (1902 – 1983 a German-born

When the idea and reality of the National Debt came about during the 18th century this was also managed by the bank. Government debt (also known as public debt or national debt) is Money (or credit) owed by any level of government either Central government 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. A charter is the grant of authority or rights stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified Events 747 BC - Epoch (origin of Ptolemy 's Nabonassar Era 364 - Valentinian I is proclaimed Year 1797 ( MDCCXCVII) was a Common year starting on Sunday (link will display the full calendar of the Gregorian calendar (or a Common The French Revolution (1789–1799 was a period of political and social upheaval in the History of France, during which the French governmental structure previously an Gold reserves (or gold holdings) are held by Central banks as a Store of value. This prohibition 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. The Bank Charter Act 1844 (7 & 8 Vict c 32 was an Act of the Parliament of the United Kingdom, passed under the government of Robert Peel, which restricted 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. London ( ˈlʌndən is the capital and largest urban area in the United Kingdom. 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. The gold standard is a monetary system in which a region's common media of exchange are paper notes that are normally freely convertible into pre-set fixed quantities of Gold HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing 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. Montagu Collet Norman 1st Baron Norman, DSO ( 6 September 1871 &ndash 4 February 1950) was an English Banker, best known A commercial bank is a type of Financial intermediary and a type of Bank. In 1946, shortly after the end of Norman's tenure, the bank was nationalised (and remains to this day government owned).

In 1997 the bank's Monetary Policy Committee was given sole responsibility for setting interest rates to meet the Government's stated Retail Prices Index inflation target of 2. CPI redirects here For other uses see CPI (disambiguation. A consumer price index ( CPI) is a measure of the average price of consumer 5%. ^[4] This decision was taken by the Chancellor of the Exchequer, Gordon Brown in consultation with Tony Blair prior to their election in 1997 though the announcement was made the day after the election. WikipediaManual of Style (biographies#Academic titles --> James Gordon Brown (born 20 February 1951 is Results The election was fought under new boundaries with a net increase of eight seats compared to the 1992 election The target has now changed to 2% since the consumer price index (CPI) replaced the retail price index (RPI) as the treasury's inflation index. CPI redirects here For other uses see CPI (disambiguation. A consumer price index ( CPI) is a measure of the average price of consumer CPI redirects here For other uses see CPI (disambiguation. A consumer price index ( CPI) is a measure of the average price of consumer ^[5] Should inflation overshoot or undershoot the target by more than 1%, the Governor will have to write a letter to the Chancellor of the Exchequer explaining why, and how he will remedy the situation. The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all Economic and Financial

The handing over of monetary policy to the Bank of England had featured as a key plank of the Liberal Democrats' economic policy since the 1992 general election. The Liberal Democrats, often shortened to Lib Dems, are a liberal Political party in the United Kingdom, formed in 1988 by merging the ^[6] A Conservative MP Nicholas Budgen had also proposed this as a Private Member's Bill in 1996, but the bill failed as it had neither the support of the government nor that of the opposition. Nicholas William Budgen ( November 3, 1937 &ndash October 26, 1998) often called Nick Budgen, was a British A Private Member's Bill is a proposed Law introduced by a backbench member of Parliament, whether from the government or the opposition side to that

In May 1997 The Governor and Company of the Bank of England regained their independence from Nationalisation and operate within the United Kingdom with autonomy from Government but under charter to it. The 1998 Bank of England Act made changes to the Bank's governing body. The Court of Directors, as it's known, is now made up of the Bank's Governor and 2 Deputy Governors, and 16 Non-Executive Directors.

More recently the Bank of England, in its role as lender of last resort has, since 2007, been supporting Northern Rock, a specialist mortgage lender that suddenly became unable to rely on wholesale market borrowing to finance its lending operation following the 2007 subprime mortgage financial crisis and the subsequent reluctance of lenders to take on more mortgage debt. See also Nationalisation of Northern Rock Northern Rock plc is a British Bank, currently under public ownership The subprime mortgage crisis is an ongoing financial crisis characterized by contracted Liquidity in global credit markets and Banking

Banknote issues

Main article: Bank of England note issues

See also: Banknotes of the pound sterling

The Bank of England has issued banknotes since 1694. The Bank of England is the Central Bank of the United Kingdom and one of eight banks legally authorised to issue banknotes in the UK Sterling banknotes are the Banknotes of the United Kingdom and British Islands, denominated in pounds sterling (symbol £ 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. The Bank issued notes for ten shillings and one pound for the first time on 22 November 1928 when the Bank took over responsibility for these denominations from the Treasury which had issued notes of these denominations three days after the declaration of war in 1914 in order to remove gold coins from circulation. The shilling is a unit of Currency used in current and former Commonwealth countries and was continued to be used in countries that left the commonwealth Events 498 - Kofi Aseidu- After the death of Anastasius II, Symmachus is elected Pope in the Lateran Year 1928 ( MCMXXVIII) was a Leap year starting on Sunday (link will display full calendar of the Gregorian calendar. World War I (abbreviated WWI; also known as the First World War, the Great War, and the War to End All main - title Coin keywords numismatics coin review

During the Second World War the German Operation Bernhard attempted to counterfeit various denominations between £5 and £50 producing 500,000 notes each month in 1943. World War II, or the Second World War, (often abbreviated WWII) was a global military conflict which involved a majority of the world's nations, including Operation Bernhard was the name of a secret German plan devised during the Second World War to destabilise the British economy by flooding the country with The original plan was to parachute the money on Britain in an attempt to destabilise the British economy, but it was found more useful to use the notes to pay German agents operating throughout Europe — although most fell into Allied hands at the end of the war, forgeries frequently appeared for years afterwards, which led banknote denominations above £5 to be removed from circulation. In general allies are people groups or nations that have joined together in an association for mutual benefit or to achieve some common purpose

In 2006, a sum in excess of £53 million in banknotes belonging to the bank was stolen from a depot in Tonbridge, Kent. The Securitas depot robbery was a Robbery which took place in the early hours of 22 February 2006, between 0100 and 0215 Tonbridge (historic spelling Tunbridge) is a Market town in the English county of Kent, with a population of 30340 in 2007 KENT (1400 AM) is a Radio station broadcasting a Adult Standards/MOR format ^[7]

See also

• Bank of England Museum
• Bank of Japan
• British coinage
• Sterling banknotes
• European Central Bank
• Federal Reserve
• Financial Sanctions Unit
• Fractional-reserve banking
• East India Company shareholders

References

External links

• Bank of England official site
• 1694 Act of Parliament founding the bank