Bank of England
The Bank of England is the central bank of the United Kingdom, responsible for setting monetary policy and issuing currency. It acts as the government's bank and is tasked with maintaining stability in the financial system. The Bank of England also regulates and supervises banks and other financial institutions to ensure the stability and effectiveness of the financial system.
6 Key excerpts on "Bank of England"
eBook - ePubCentral Bank Independence, Regulations, and Monetary Policy
From Germany and Greece to China and the United States
- Ranajoy Ray Chaudhuri(Author)
- 2018(Publication Date)
- Palgrave Macmillan(Publisher)
...However, even on this front, the United Kingdom’s participation in the behind-the-scenes negotiations and the coordinated interest rate cuts by the central banks of multiple countries in October 2008 was only possible due to the independence of its central bank. Moreover, the hands of the Bank of England have been tied since 1997, when its banking sector supervisory role was taken away. At the time of the financial crisis, that responsibility was shared by the Treasury, the Bank of England and the Financial Services Authority, creating overlapping jurisdictions and confusion. 48 While the monetary stimulus in the form of low interest rates and quantitative easing helped the United Kingdom weather the crisis, Prime Minister Theresa May said in a speech at the Conservative Party Conference on October 5, 2016, that the same policies had significantly redistributed wealth in the country. 49 The losers were the savers, as interest rates had plummeted, while the winners were the borrowers and those who held stocks, bonds and real estate, as the value of these assets had risen. Her spokesperson later clarified that she wasn’t planning to intervene in the autonomous decision-making of the central bank. As a public body, however, the Bank of England is answerable to both the parliament and the general public. The bank holds public meetings with the House of Commons Treasury Committee when they publish their Inflation Report and their Financial Stability Report. The bank also holds a press conference on the day the reports are published. Footnotes 1 Andréadès, A. M. (2013). History of the Bank of England. Routledge. 2 Bank of England. (2018, June 26). Our History. https://www.bankofengland.co.uk/about/history (accessed July 25, 2018). 3 Bank of England. KnowledgeBank. http://edu.bankofengland.co.uk/knowledgebank/who-owns-the-bank-ofengland/ (accessed April 3, 2018). 4 Howells, P. (2013)...
eBook - ePubUnderstanding Central Banking
The New Era of Activism
- David M Jones(Author)
- 2014(Publication Date)
- Routledge(Publisher)
...The Bank of England was nationalized in 1946, and subsequently became an independent public organization in 1997. It has the statutory responsibility for setting the UK’s official interest rate, which is the interest rate at which the central bank deals with the banking system. In the modern era, a nine-member monetary policy committee (MPC) decides on the appropriate level of this official interest rate. As emphasized by Fed chairman Bernanke in his series of lectures to George Washington University students in March 2012 reprinted in book form, The Federal Reserve and the Financial Crisis (Bernanke 2013), the Fed turned first, in fighting the Great Credit Crisis of 2007–2009, to the lender-of-last-resort function to supply emergency liquidity through short-term collateralized discount window loans to banks and eventually other institutions as well. According to Bernanke, this initial reliance on the central bank’s collateralized lending function has a long lineage that stretches back at least to the dictum of the famous nineteenth-century British central banking expert, Walter Bagehot. Bagehot stated in his widely read book Lombard Street: A Description of the Money Market (1873), that central banks—the only institutions with the power to increase aggregate liquidity—should respond to crises or panics by lending freely against sound collateral at a penalty rate. The Overend Gurney Crisis Valuable insight into the early days of the central bank as a lender of last resort can be found in a recent paper presented by Mark Flandreau and Stefan Ugolini at a conference on Jekyll Island, South Carolina, on November 5–6, 2010. Titled “Where It All Began” (2011), the paper examines the origins and importance of the Bank of England’s early practice as the lender of last resort at the peak of the Overend, Gurney Crisis of 1866. Overend, Gurney was a London wholesale bank that collapsed in 1866, severely unsettling the London money market...
eBook - ePubCapital City
London as a Financial Centre
- Hamish McRae, Frances Cairncross(Authors)
- 2017(Publication Date)
- Routledge(Publisher)
...It intervenes in the foreign exchange market; and it operates in the bill market and gilt-edged market. Finally, it controls the level of credit and it takes responsibility for the good order of the City. Most other central banks perform this under a legal banking code. Until 1979 the Bank of England was unique in that it did so largely under a set of voluntary agreements. Even now, though the 1979 Banking Act gives it formal powers, it still relies on its traditional authority to get its way. Some of the roles clash or overlap with others. Thus the Bank's responsibility for raising funds for the government may make it difficult for the Bank also to enforce the monetary policy which the government wants to pursue. In controlling the banks, it may find it difficult to perform another function: that of channelling their views back to Whitehall. And in maintaining good order in the City, it may find it difficult to promote competition energetically among City institutions. * Answer to Question 14,597, Minutes of Evidence, Royal Commission on Indian Currency and Finance, 1926. How the Bank is run The Bank is not a branch of the Civil Service. It is a nationalised industry but with a number of special peculiarities. While the boards of other nationalised industries are appointed by a minister, that of the Bank, called the Court, is technically appointed by the Crown. In reality, directors are chosen by the Prime Minister with the advice of the Chancellor of the Exchequer. While in other nationalised industries directors’ salaries are laid down by the minister, the directors of the Bank have the duty of deciding how much should be paid to the Bank's six full-time or ‘executive’ directors (including the Governor and the Deputy Governor). In 1983-4, the annual salary of the Governor, Robin Leigh-Pemberton, came to nearly £82,000 excluding pension contributions...
- Panicos Demetriades(Author)
- 2019(Publication Date)
- Agenda Publishing(Publisher)
...The Bank of England’s objectives are set annually by the government, however. Ever since the bank was granted operational independence, in 1997, the main aim of monetary policy has been the achievement of low and stable inflation; other government objectives, including employment and growth, have been subordinated to price stability – very much like the ECB. Nevertheless, although, in the BoE case, the mandate can be changed by the government in any given year, the ECB’s mandate cannot change without a revision in the TFEU; such a change requires unanimous agreement by all EU member states. The Swedish Riksbank was the first institution recognized as a central bank. It was established in 1668 as a joint-stock bank, and chartered to lend funds to the government and to act as a clearing house for commerce. It was followed by the Bank of England, which was established by royal charter in 1694 to raise money to fund a war with France. The Bank of England was also a joint-stock company. Over 1,200 people purchased the stock of the bank, totalling £1.2 million, which was the value of the loan made to the government by the bank. The first shareholders of the BoE came from a wide variety of backgrounds; they included carpenters, grocers, merchants, knights and royalty. The Banque de France was established in 1800 by Napoleon I, with a specific remit to stabilize the currency after the hyperinflation of paper money during the French Revolution. Over time, early central banks came to serve as banks for commercial banks, holding their deposits and providing emergency loans during times of financial distress, which explains their emergence as lenders of last resort. During the gold standard period, which prevailed until 1914, central banks held gold reserves to ensure that their notes could be converted into gold. Maintaining gold convertibility served as the economy’s nominal anchor...
eBook - ePubBanking Crises
Perspectives from the New Palgrave Dictionary of Economics
- Garett Jones, Garett Jones(Authors)
- 2016(Publication Date)
- Palgrave Macmillan(Publisher)
...London: Bank of England. Bank for International Settlements. 1963. ‘Bank of England’, in Eight European Central Banks. Basle: Bank for International Settlements. Benati, L. 2005. The Inflation-targeting framework from an historical perspective. Bank of England Quarterly Bulletin 45(2), 160–8. Bowman, W. 1937. The Story of the Bank of England: From its Foundation in 1694 until the Present Day. London: Herbert Jenkins. Chapham, R. 1968. Decision Making: A Case Study of the Decision to Raise the Bank Rate in September 1957. London: Routledge and Kegan Paul. Clapham, J. 1944. The Bank of England: A History. Cambridge: Cambridge University Press. Clay, H. 1957. Lord Norman. London: Macmillan. Committee on Currency and Foreign Exchange After the War (Cunliffe Committee). 1918. First Interim Report, Cmnd. 9182; and 1919. Final Report, Cmnd 464, London: HMSO. Eichengreen, B. 1992. Golden Fetters: The Gold Standard and the Great Depression. New York: Oxford University Press. Feavearyear, A. 1963. The Pound Sterling: A History of English Money, 2nd edn, rev. E. Morgan. Oxford: Clarendon. Fforde, J. 1992. The Bank of England and Public Policy 1941–1958. Cambridge: Cambridge University Press. Fischer, S. 1994. ‘Modern central banking’, in F. Capie, C. Goodhart, S. Fischer and N. Schnadt, The Future of Central Banking. Cambridge: Cambridge University Press. Geddes, P. 1987. Inside the Bank of England. London: Boxtree. Giuseppi, J. 1966. The Bank of England: A History from its Foundation in 1694. London: Evans Brothers Limited. Hennessey, E. 1992. A Domestic History of the Bank of England 1930–1960. Cambridge: Cambridge University Press. Goodhart, C. 2000. The organisational structure of banking supervision. Special Paper No. 127. London: Financial Markets Group Research Centre, London School of Economics. Subsequently published in Economic Notes 31, 1–32. Howson, S. 1975. Domestic Monetary Management in Britain, 1919–38. Cambridge: Cambridge University Press. Radcliffe Report...
eBook - ePubFinancial Stability and Prudential Regulation
A Comparative Approach to the UK, US, Canada, Australia and Germany
- Alison Lui(Author)
- 2016(Publication Date)
- Routledge(Publisher)
...Particular attention will be paid to the UK, Germany, EU and US since Australia and Canada fared better in the global financial crisis (the relatively new regulatory framework of the European Systemic Risk Board deserves closer examination); and the final section offers a conclusion. It will be seen that central banks such as the Bank of England, the ECB and the Federal Reserve have become powerful since the global financial crisis primarily because they were ill-equipped entering the crisis. The lender-of-last-resort role and micro-prudential supervision are crucial in a crisis, and it is justifiable for central banks to have more interest in financial supervision since they usually increase and widen their range of acceptable collateral in a crisis. Whether the twin functions of financial stability and prudential regulation should co-exist under the same roof depends to a certain degree on each country’s culture, politics and legal system. However, clear communication and co-operation are necessary to ensure that central banks and regulatory agencies sustain the synergy effectively. Financial stability and central banks Central banks are government organisations shaped by public law (Meade 2012). In Fischer’s lecture of 1994, he sets out the principles of the new central-bank doctrine whereby central banks must have a clear mandate to maintain price stability, exercise independence in using monetary tools such as setting interest rates and be accountable for their actions (Liikanen 2013). Modern central banks are primarily occupied with monetary-policy matters (Bank for International Settlements 2009) since confidence in price stability and the currency is crucial for a healthy economy. With time, the combination of economic crises, wars and the breakdown of the gold standard transformed central banks from government banks into public agencies...
