Bank of England

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. The Bank of England is responsible for issuing banknotes in England and Wales, managing the country's foreign exchange and gold reserves, and setting monetary policy.

History

The Bank of England was founded by Royal Charter on 27 July 1694, following a proposal by the Scottish entrepreneur William Paterson. The bank was established to act as the government's banker and debt-manager, a role it continues to perform today. Initially, it was a private institution, but it was nationalized in 1946.

Functions

The Bank of England has several key functions:

• Monetary Policy: The Bank's Monetary Policy Committee (MPC) is responsible for setting the interest rate to meet the government's inflation target.
• Financial Stability: The Bank works to maintain the stability of the financial system as a whole.
• Banknotes: The Bank has the sole right to issue banknotes in England and Wales.
• Government's Banker: The Bank acts as the banker to the UK Government.

Structure

The Bank of England is governed by a board of directors, known as the Court of Directors. The Court is responsible for setting the Bank's strategy and budget, and it oversees the work of the MPC.

Location

The Bank of England is located in the City of London, the historic financial district of London. The building, designed by architect John Soane, is a notable landmark.

Banknotes

The Bank of England is the only bank in England and Wales that is allowed to issue banknotes. The design and security features of these banknotes are regularly updated to prevent counterfeiting.

Governors

The Governor of the Bank of England is the most senior position within the Bank. The current Governor is Andrew Bailey, who has been in office since March 2020.

See also

• Monetary Policy Committee
• Pound sterling
• City of London
• Financial Services Authority
• Royal Mint