The Bank of England (known as the Bank of England in Hong Kong, English: Bank of England) is the central bank of the United Kingdom. The bank was established privately in 1694. It has been subject to the policies of the Treasury since 1931 and was nationalized in 1946. In 1997 the Bank of England became an independent public sector, wholly owned by the government but with its own independent monetary policy.

The Bank of England has a monopoly on the issuance of banknotes in England and Wales, and the Bank's Monetary Policy Committee has been given the mandate to manage national monetary policy. The Treasury retains the right to take over this authority in extreme cases (but must obtain parliamentary approval within 28 days of takeover).

It is responsible for the money supply, printing banknotes, providing money to the British government and other banks, and managing gold and currency reserves.

The headquarters of the bank has been located in Needle Street in the City of London since 1734, so it is nicknamed "the old housekeeper of Needle Street". The head of the bank is the president, appointed by the government.

The current governor of the Bank of England is Andrew Bailey, who succeeded Mark Carney on March 16, 2020, for an eight-year term. Mark Carney is a Canadian and the first foreign governor in the history of the Bank of England.

History

Founding

Britain has become a European power after the Middle Ages. At the end of the 17th century, it joined forces with many countries to defeat the then-prosperous French Empire in the war of the Great Alliance. However, at the Battle of Beech Point in 1690, the French Navy overwhelmingly defeated the Anglo-Dutch joint fleet, which prompted Britain to strengthen the construction of the then-sluggish British Navy in order to re-establish itself as a world power.

The British Navy at that time was unable to promote the construction of the navy without state funding. The government of King William III was also uncreditworthy, and the Admiralty had difficulty borrowing the required funds of £1,200,000 (8% annual interest rate) from the society. In order to attract interested investors to finance the construction of the British Navy, William Paterson advocated the establishment of the Bank of England and the issuance of shares to the private people. Finally, in 1694, the British Parliament passed the Bank of England Act, establishing the Bank of England Company. The government gave the company the right to control the government's revenue and expenditure, and issued a royal charter to make the Bank of England the only institution in the United Kingdom with the right to print and issue legal tender sterling. Ultimately, the Bank of England successfully raised 1,200,000 pounds sterling in 12 days, nearly half of which became the funding for the construction of the British Navy.

18th century

British government bonds were issued in the 18th century and were administered by the Bank of England. In the renewal of the business license in 1781, there was a license condition that "the bank must have enough gold to pay for the currency issued", but during the Second Anti-French League and the French Revolution, battles such as the Battle of Fishgard made gold reserves unbearable. On February 26, 1797, the government promulgated the Banking Supervision Act 1797, which prohibited the withdrawal of gold from banks. This provision lasted until 1821.

19th century

For sixteen years from August 1800 to August 1816, the Bank of England discounted an average of £600,000 per year to save gold reserves under the gold standard. The Rothschild family appeared and participated in the issuance of foreign bonds and the reserves of the Bank of England. Alfred de Rothschild served on the Board of Directors during a period of falling silver prices in response to the long depression of the late 19th century.

20th Century

Britain maintained a gold standard until 1931, when the British Treasury managed its gold reserves. Thereafter, the Bank of England took over the management of its gold reserves.

From 1920 to 1944, when Montague Norman was Governor, the Bank of England switched from commercial banking to a central bank. The Labour government nationalized the Bank of England through the Bank of England Act of 1946.

On Black Wednesday, September 16, 1992, the Bank of England was dubbed "the man who bankrupted the Bank of England" by famed speculator George Soros who forced the Bank of England to abandon its hold on the pound and exit the European Exchange Rate Mechanism by shorting more than 10 billion pounds and leverage.

Past Governors

Name Term Source Mark Carney July 1, 2013 - March 15, 2020 Andrew Bailey March 16, 2020 - March 15, 2028