Among all the central banks of Europe, the Bank of England holds a special place of honor, and there are very good reasons for this. In fact, he is a double champion. In addition to being much older than all other European state banks, he is also the oldest financial institution in the entire Foggy Albion. No wonder he came up with the playful name "Old Lady", thus hinting at his conservatism.
How and when the Central Bank of England was 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, whose owners became approximately 1260 shareholders, including the king himself and several members of Parliament. The first installment amounted to one thousand two hundred pounds, and these funds were the first loan to the government. So the Bank of England appeared - an organization without which it is difficult to imagine what the financial system of Great Britain and many other countries would be like.
History of becoming
At first, this organization had the right to provide loans on bail, conduct operations with commercial bills, issue transferable bills, buy and sell silver and gold. The king did not have absolute power over her - in order to get a loan he had to get the permission of the parliament. It must be said that until 1979 there were no regulatory documents regulating the work of this institution. And only this year, finally, the relevant law was passed, according to which the Bank of England systematizes all credit organizations that accept deposits. From this moment, after verification, each of them receives a new status. They are transformed either into recognized banks in England or into licensed deposit-taking companies. In the same year, 1979, the power in the country was taken over by conservatives led by Margaret Thatcher, and monetary policy became the focus of attention . Control over the activities of banks is carried out by the government through the sale and purchase of bills. Then the 90s come, and open market operations are considered a priority.
The Bank of England, carrying out the decree of the Treasury, concludes transactions with the aim of regulating the level of
gold and foreign exchange reserves. In addition, he can and must carry out interventions to control 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 independently decide on the value of interest rates.
Control
This financial institution is headed by a manager (service life - 5 years), which is part of the directorate. Besides him, this body also includes 16 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 heads of major companies. The Directorate must 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.