Banca Angliei - Bank of England

I. Introduction

When I started doing this project I didn’t know what bank I should choose so I searched on the internet for the most successful banks in Europe and I found that the Bank of England is one of them.

The Bank of England (formally the Governor and Company of the Bank of England) is, despite its name, the central bank of the whole of the United Kingdom and is the model on which most modern, large central banks have been based. It was established in 1694 to act as the English Government's banker, and to this day it still acts as the banker for HM Government. The Bank was privately owned and operated from its foundation in 1694 until it was nationalized in 1946. In 1997 it became an independent public organization, wholly-owned by Government, with independence in setting monetary policy. The Bank has a monopoly on the issue of banknotes in England and Wales, although not in Scotland or Northern Ireland. The Bank's Monetary Policy Committee has devolved responsibility for managing the monetary policy of the country. The Treasury has reserve powers to give orders to the committee "if they are required in the public interest and by extreme economic circumstances" but such orders must be endorsed by Parliament within 28 days.

The Bank's headquarters has been located in London's main financial district, the City of London, on Threadneedle Street, since 1734. It is sometimes known by the metonym The Old Lady of Threadneedle Street or simply The Old Lady. The current Governor of the Bank of England is Mervyn King, who took over on 30 June 2003 from Sir Edward George. As well as the London offices, the Bank of England also has secondary offices on King Street in Leeds.

II. History

England's crushing defeat by France, the dominant naval power, in naval engagements culminating in the 1690 Battle of Beachy Head, became the catalyst to Britain rebuilding itself as a global power. England had no choice but to build a powerful navy; as there were no funds available, in 1694 a private institution, the Bank of England, was set up to supply money to the King. £1.2m was raised in twelve days; half of this was used to rebuild the Navy.

As a side-effect, the huge industrial effort needed started to transform the economy, from iron works making nails to agriculture feeding the quadrupled strength of the Royal Navy. This helped the new United Kingdom – England and Scotland were united in 1707 – to become prosperous and powerful. Together with the power of the navy, this made Britain the dominant world power in the late eighteenth and early nineteenth centuries.

The bank was founded by the Scotsman William Paterson in 1694 to act as the English Government's banker. He proposed a 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 of 1695. Public finances were in so dire a condition at the time that the terms of the loan were that it was to be serviced at a rate of 8% per annum, and there was also a service charge of £4000 per annum for the management of the loan. The first governor was Sir John Houblon, who is depicted in the £50 note issued in 1994. The charter was renewed in 1742, 1764, and 1781.