Bank of England

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Bank of England

The central bank of the United Kingdom. It is let by a Governor, which is at least nominally a civil service post. The Bank of England prints money for England and Wales (though not for Northern Ireland or Scotland) and acts as a lender of last resort for all banks in the UK. Through its semi-independent Monetary Policy Committee, the Bank of England sets monetary policy for the UK, particularly by attempting to ensure that inflation remains as close as possible to 2%. If the inflation rate is more than 1% in either direction of 2%, the Governor of the Bank of England must write the Chancellor of the Exchequer to explain how he/she will remedy the situation. It was established in 1694 and served as the model for the creation of most modern central banks. See also: Federal Reserve System, European Central Bank.

Bank of England

the CENTRAL BANK of the UK which acts as banker to the government and the BANKING SYSTEM and acts as the authority responsible for implementing MONETARY POLICY. The Bank of England handles the government's financial accounts in conjunction with the TREASURY, taking in receipts from taxation and the sale of government assets, and making disbursements to the various government departments to fund their activities. The Bank acts as the government's broker in its borrowing and lending operations, issuing and dealing in government BONDS and TREASURY BILLS to underpin its year-to-year budgetary position and management of the country's NATIONAL DEBT.

COMMERCIAL BANKS hold accounts with the Bank of England and, in its role as banker to the banking system, the Bank makes it possible for banks to settle their indebtedness with one another by adjusting their accounts as appropriate (see CLEARING HOUSE SYSTEM).

The Bank of England and its satellite, the Royal Mint, are responsible for issuing the country's basic stock of money – LEGAL TENDER consisting of bank notes and coins (see MONEY SUPPLY). The bank occupies a key role in the implementation of monetary policy through controls on the money supply, influencing the level of bank deposits and credit creation by the financial institutions, particularly commercial banks, while the MONETARY POLICY COMMITTEE has the responsibility for setting ‘official’ INTEREST RATES in the UK which in turn determines all other short-term interest rates (BASE RATE, BILL DISCOUNTING INTEREST RATE, INTERBANK CLEARING INTEREST RATE).

The Bank is also responsible for managing the country's EXCHANGE RATE and holding the country's stock of INTERNATIONAL RESERVES to be used in the financing of balance of payments deficits. The Bank of England operates a ‘Foreign Exchange Equalization Account’ which it uses to intervene in the FOREIGN EXCHANGE MARKET, buying and selling currencies to support the exchange rate at a particular level or to ensure that it falls (depreciates) or rises (appreciates) in an ‘orderly’ manner. See LENDER OF LAST RESORT.

Bank of England

the CENTRAL BANK of the UK, which acts as banker to the government and the BANKING SYSTEM and acts as the authority responsible for implementing MONETARY POLICY. The Bank of England handles the government's financial accounts in conjunction with the TREASURY, taking in receipts from taxation and the sale of government assets, and making disbursements to the various government departments to fund their activities. The bank acts as the government's broker in its borrowing and lending operations, issuing and dealing in government BONDS and TREASURY BILLS to underpin its year-to-year budgetary position and management of the country's NATIONAL DEBT.

COMMERCIAL BANKS hold accounts with the Bank of England and, in its role as banker to the banking system, the Bank makes it possible for banks to settle their indebtedness with one another by adjusting their accounts as appropriate (see CLEARING HOUSE SYSTEM).

The Bank of England and its satellite, the Royal Mint, are responsible for issuing the country's basic stock of money - LEGAL TENDER, consisting of bank notes and coins (see MONEY SUPPLY). The Bank occupies a key role in the implementation of monetary policy through controls on the money supply, influencing the level of bank deposits and credit creation by the financial institutions, particularly commercial banks (see BANK DEPOSIT CREATION), while the MONETARY POLICY COMMITTEE has the responsibility for setting ‘official’ INTEREST RATES in the UK, which in turn determines all other short-term interest rates (BASE RATE, BILL DISCOUNTING INTEREST RATE, INTERBANK CLEARING INTEREST RATE).

The Bank is also responsible for managing the country's EXCHANGE RATE and holding the country's stock of INTERNATIONAL RESERVES to be used in the financing of balance-of-payments deficits. The Bank of England operates a ‘Foreign Exchange Equalization Account’ that it uses to intervene in the FOREIGN EXCHANGE MARKET, buying and selling currencies to support the exchange rate at a particular level or to ensure that it falls (depreciates) or rises (appreciates) in an ‘orderly’ manner. See LENDER OF LAST RESORT.

References in periodicals archive ?
The Bank of England and (inset below) John McDonnell
Specically, the Bank of England is focused on the amount of slack that it considers there to be in the economy.
The Bank of England then sold yet another tranche of looted gold for the Nazi regime in June 1939.
Carney is a Canadian citizen (and as such already a subject of HM The Queen) and has indicated that he will apply for British citizenship and serve a term of five years as Governor of the Bank of England.
The Bank of England expects to conclude its latest 75 billion pounds in asset purchases -- known as quantitative easing, or QE -- by early next month.
5 per cent, the Bank of England would increase the amount of money pumped into the economy from Au175 billion to Au225 billion.
In the decade since the Bank of England was granted independence, inflation has on average been on target, and volatility of output and inflation during this period was unusually low by historical norms.
The Bank of England is tipped to cut its benchmark rate to 0.
The Bank of England made an unprecedented move to deny the rumours that Halifax Bank of Scotland had turned to it for emergency funding.
The Bank of England yesterday moved to pump pounds 5 billion into frozen money markets to ease credit fears.
The Bank of England raised short-term interest rates from 4.
For several years during the war, the Bank of England had withdrawn the domestic issue of 5 [pounds sterling] notes and issued in their stead notes that had easily identifiable printing errors on their face.