Bank of England
The Bank of England is the central bank for the United Kingdom and is responsible for issuing printed currency (coins are issued by the Royal Mint), setting interest rates, managing inflation and as the lender of last resort for banks and investors in the United Kingdom. It was founded in 1694 by the Bank of England Act 1964. The 'Old Lady', the administrative home of the Bank, is located on Threadneedle Street in the City, London's financial and business district. In 1947, the bank was nationalised. Following the election of Tony Blair's New Labour party in 1997, the bank was granted operational independence - interest rate setting and other operations are now managed independently of political oversight or control. The current governor of the Bank is Mervyn King.
The last major legislative change to the operation of the Bank of England was the Banking Act 2009.
[edit] Monetary Policy Committee
Monetary policy is determined by the Monetary Policy Committee which meets every month for two days to determine interest rates in accordance with the current inflation target. The Committee is made up of the Governor, the two Deputy Governors and six other members. A representative from the Treasury is allowed to attend the Monetary Policy Committee meetings in an advisory capacity but may not vote. The Committee publishes minutes and records of votes, and is accountable to parliamentary subcommittees including the Treasury Committee.
In March 2009, due to the widespread problems in the banking sector and the economy more generally following the collapse of a number of international and large banks - Northern Rock, Lehmann Brothers, Freddie Mac/Fannie Mae etc. - the Bank of England has also been allowed to inject money into the banking sector and elsewhere in the economy as part of the process of quantitative easing. The process of quantitative easing is directed by the Monetary Policy Committee and is undertaken through the purchase of assets. As of December 17, 2009, the Bank has purchased £190,143,000,000 worth of assets, the vast majority of which are in gilts. These are financed using Treasury Bills, a government bond.
[edit] Banknotes
The Bank of England has the responsibility for designing and issuing banknotes. In the United Kingdom, four denominations of banknotes are used: £5, £10, £20, £50.
On the front of Bank of England issued banknotes is a coloured decorative background on the left, upon which the words "Bank of England" appear along with the words "I Promise To Pay The Bearer On Demand The Sum of Five Pounds" (for example) and the signature of the Chief Cashier. The image of the current monarch is also printed on the front side of the note - Quen Elizabeth II.
On the reverse side of the note, there are images depicting a particular British historical figure:
- £5 notes depict the Quaker social and penal reformer Elizabeth Fry (1780–1845).
- £10 notes depict the naturalist and co-discoverer of evolution by natural selection, Charles Darwin (1809–1882). On the left hand side of the reverse side of the note, there is an image of Darwin's magnifying lens and flora and fauna that Darwin found on his travels on HMS Beagle including the infamous finches.
- £20 notes depict the philosopher and father of modern economics Adam Smith. On the left-hand side of the reverse side of the note, there is an image of a number of factory workers, to represent the division of labour described in Wealth of Nations.
- £50 notes depict the first governor of the Bank of England, Sir John Houblon and Houblon's house in Threadneedle Street, which is now the site of the Bank.
Old £20 notes used to contain an image of Sir Edward Elgar and 1990-issued £10 notes contained an image of Florence Nightingale. Others featured on banknotes include William Shakespeare, Sir Christopher Wren, Sir Isaac Newton, the 1st Duke of Wellington, George Stephenson, Michael Faraday and Charles Dickins.
The Bank publish a list of other figures who have been suggested by the public for inclusion on banknotes. A full list of these is included on the Catalogs subpage.
