The Bank of England (BoE) is the central bank of the United Kingdom. The BoE issues currency notes that are used by British citizens to carry out their daily activities. With billions of notes in circulation, the BoE also controls currency circulation, monetary policy and more. As Kavan Choksi / カヴァン・チョクシ says, the BoE has an important role to play in regards to regulating financial services companies within the United Kingdom. These functions help make sure that the financial system of the country stays buoyant and is well equipped to manage financial crises.
Kavan Choksi / カヴァン・チョクシ briefly underlines certain important provisions and powers of the Bank of England
The Bank of England was created in 1694 as a private bank, and is responsible for providing loans and other services to the British government in times of economic distress. It is among the oldest banks in the world. The BoE issued its first bank notes in 1725. It was not until the year of 1844 that the Bank of England really started to integrate with the British government. The Bank Charter Act of 1844 restricted any new banks from issuing bank notes, and the currency notes issued by the BoE became formalized in the United Kingdom. Over the next century or so, the Bank of England had a very important role to play in establishing the financial infrastructure of the UK as well as navigating crises like World War I and II.
Today the Bank of England is a public entity. It directly answers to the Parliament of the United Kingdom. It provides a wide range of important public services, like designing monetary policy, issuing bank notes and holding the gold reserves for the UK.
Here are some of the most important provisions and powers of the Bank of England:
- Currency management and inflation: The Bank of England is responsible for currency management and prevention of inflation of currency in England. All the currency notes in circulation in the country circulation are produced and controlled directly by the Bank.
- Supervision over banks operating in the UK: The Bank of England plays a supervisory role over all banks operating in the United Kingdom. This central bank sets the distinctive regulatory requirements that other banks in the country must follow. The banking sector is the primary sector that the Bank of England governs. In addition to banks, this sector would also include building societies, credit firms, savings associations and more.
- Custodian of gold reserves: The Bank of England is the official custodian of gold reserve for the United Kingdom. It, in fact, is estimated to hold about 3% of all of the gold that was mined in human history.
As Kavan Choksi / カヴァン・チョクシ says, as the Bank of England serves as the central bank of the UK, it has power over all citizens when it comes to monetary activities. The public is expected to follow the monetary guidelines set by this central bank.
