2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
Among all the central banks in Europe, the Bank of England occupies a special place of honor, and there are very good reasons for this. In fact, he is a double record holder. In addition to being much older than all other European state-owned banks, it is also the oldest financial institution in all of Foggy Albion. No wonder they came up with the playful name "Old Lady", thus hinting at his conservatism.
How and when was the Central Bank of England founded
The history of this organization begins in 1694. At that time, the government and the king of England needed a loan to finance the war against France. One Scottish financier, whose name was William Peterson, came up with the idea of creating a special financial institution that would print new banknotes and thus cover the budget deficit. As a result, a joint-stock company was created, the owners of which were approximately 1260 shareholders, including the king himself and several members of theParliament. The amount of the first installment amounted to one thousand two hundred pounds sterling, and these funds became the first loan to the government of the country. This is how the Bank of England appeared - an organization without which it is difficult to imagine what the financial system of the UK itself and many other countries would be like.
Beginning history
At first, this organization had the right to provide secured loans, deal with commercial bills, issue bills of exchange, buy and sell silver and gold. The king did not have absolute power over her - in order to receive a loan, he had to obtain the permission of Parliament. It must be said that until 1979 there were no regulatory documents regulating the work of this institution. And only this year, finally, an appropriate law was adopted, according to which the Bank of England systematizes all credit organizations that accept deposits. From now on, after verification, each of them receives a new status. They become either recognized banks in England or licensed deposit taking companies. In the same year, 1979, the Conservatives, led by Margaret Thatcher, take over the power in the country, and monetary policy becomes the center of attention. Banks are controlled by the government through the sale and purchase of bills. Then come the 90s, and open market operations are considered a priority.
The Bank of England, following the decree of the Treasury, enters into transactions in order to regulate the levelgold reserves. In addition, he can and is obliged to carry out interventions to control the exchange rate of the national currency. In 1997, a Memorandum was signed between the Bank of England, the Office for Supervision and Financial Regulation and the Treasury, which describes the principles and conditions for their smooth work aimed at ensuring the financial stability of the state. In the same year, in May, the Central Bank receives from the government the right to make its own decision on the value of interest rates.
Management
This financial institution is headed by a manager (service life - 5 years), who is a member of the directorate. In addition to him, this body includes 16 more members appointed by the government for a three-year term. 4 directors are included in the staff of the Bank itself, and the remaining 12 are the heads of the largest companies. The Directorate is obliged to meet at least once a month and resolve all issues that are somehow related to the functions of the Bank. Any practical issues are resolved at the level of the Treasury Committee, which consists of 5 directors, a manager and his deputy.
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