Bank of England: the Central Bank of United Kingdom

Topics: Bank of England, Bank, Central bank Pages: 3 (979 words) Published: February 6, 2013
Bank of England
The Bank of England, is the central bank of the United Kingdom . Established in 1694, it is the second oldest central bank in the world, and the world's 8th oldest bank if you include commercial banks. It was established to act as the English Government's banker, and to this day it still acts as the banker for the U.K Government, the Bank was privately owned and operated from its foundation in 1694 but it was nationalised in 1946. The bank of England has about £156 billion pounds worth of gold ingots as a backup if people start to ask for their money back , the bank also acts a custodian for other counties gold, including Germanys and various other counties. History

The establishment of the bank was devised by Charles Montagu, Earl of Halifax, in 1694.He suggested 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. The Royal Charter was granted on 27 July through the passage of the Tonnage Act 1694. Public finances were in poor a condition at the time that the terms of the loan were that it was to be serviced at a rate of 8% per year, and there was also a service charge of £4,000 per year for the management of the loan. The first governor was Sir John Houblon, who is depicted in the £50 note issued in 1994. The Bank's original home was in Walbrook in the City of London, unitl it moved to its current location on Threadneedle Street, and thereafter slowly acquired neighbouring land to create the bulding 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 26 February 1797 when war had so diminished gold reserves that the government prohibited the Bank from paying out in gold. This prohibition lasted until 1821. The...
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