The Bank of England occupies one of the leading positions among the Central Banks of Europe. It is the oldest financial institution with a conservative approach, an impeccable reputation and a rich history, and it was not for nothing that it was tacitly named “Old Lady”.
The Bank of England was opened in 1694. The government needed funds to continue the war with France. Scottish financier William Peterson proposed the creation of a special financial institution that would print paper banknotes to support the country's budget. As a result, a special joint stock company was created, owned by 1,260 shareholders, including the king and a number of members of parliament.
This is how the Bank of England appeared, and the first installment was 1200 pounds sterling, which became the initial loan to the government.
The building for the bank was designed by the architect John Soan. It turned out to be a real stone safe with blank walls and bars on the windows, which until recently was guarded by specially trained guards.
In 1925-39, the bank was completely rebuilt by Herbert Baker, but the blank wall was preserved. It is noteworthy that the floor in the hall at the main entrance is decorated with mosaics by the famous Russian artist Boris Anrep.
Now the building has been modernized and equipped with modern electronic security systems.
Initially, this organization had the right to issue loans on collateral, issue bills of exchange, conduct transactions with market bills, and also buy and sell precious metals. Moreover, the king did not have complete power over the bank. To receive a loan, he had to secure the consent of parliament.
As a result, the bulk of English money (namely gold and silver coins) went to the vaults of the Bank of England. To ensure the viability of paper banknotes, their total amount was tied to the weight of the gold in bank vaults. Paper money was in circulation as a substitute for gold (the former main currency of England). Gold was the standard by which the amount of paper money was measured. The binding of paper notes issued by the bank to the precious metal acquired the name "Gold Standard".
It is noteworthy that until 1979, there were no official regulations governing the work of this institution. In 1979, a law was passed according to which the Bank of England classifies all credit institutions that accept deposits. From now on, after a serious check, all of them were assigned a new status. Some organizations receive the status of recognized banks in England, others - licensed companies for accepting deposits. In the same year, conservatives, led by Margaret Thatcher, came to power in the country, and monetary policy was in the center of attention. Control over the activities of all banks in Britain is carried out by the government directly through the sale and purchase of bills.
In the 90s of the last century, market operations became priority. The Bank of England, following the Treasury decree, concludes numerous transactions in order to maintain the required amount of the country's gold and foreign exchange reserves. He also had to control the exchange rate of the national currency.
In 1997, the Central Bank of England, the Financial Conduct Authority and the Treasury signed the Memorandum. The document spelled out the principles and conditions for their well-coordinated work aimed at creating the country's financial stability.
The Bank of England is headed by the Chief Executive Officer. He sits on a directorate with 16 other members appointed by the government. Among them there are 4 directors of the Bank itself, and the other 12 people are owners or managers of large holdings and companies. The directorate should meet at least once a month in order to discuss and resolve important issues related to the work of the bank. Current issues and working moments are decided by the treasury committee. The Treasury consists of 5 directors, a manager and his deputy.
