Bank of England

Last updated
Governor and Company of the Bank of England
Bank of England.svg
Headquarters Threadneedle Street
London, EC2
England, United Kingdom
Coordinates 51°30′51″N0°05′19″W / 51.5142°N 0.0885°W / 51.5142; -0.0885 Coordinates: 51°30′51″N0°05′19″W / 51.5142°N 0.0885°W / 51.5142; -0.0885
Established27 July 1694;325 years ago (1694-07-27)
Governor Mark Carney (since 2013)
Central bank ofUnited Kingdom
Currency Pound sterling
GBP (ISO 4217)
Bank rate 0.75% [1]
Website www.bankofengland.co.uk

The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of the United Kingdom, it is the world's eighth-oldest bank. It was privately owned by stockholders from its foundation in 1694 until it was nationalised in 1946. [2] [3]

Central bank public institution that manages a states currency, money supply, and interest rates

A central bank, reserve bank, or monetary authority is an institution that manages the currency, money supply, and interest rates of a state or formal monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and also generally controls the printing/coining of the national currency, which serves as the state's legal tender. A central bank also acts as a lender of last resort to the banking sector during times of financial crisis. Most central banks also have supervisory and regulatory powers to ensure the solvency of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member banks.

United Kingdom Country in Europe

The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a sovereign country located off the north-western coast of the European mainland. The United Kingdom includes the island of Great Britain, the north-eastern part of the island of Ireland, and many smaller islands. Northern Ireland is the only part of the United Kingdom that shares a land border with another sovereign state, the Republic of Ireland. Apart from this land border, the United Kingdom is surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the south and the Celtic Sea to the south-west, giving it the 12th-longest coastline in the world. The Irish Sea separates Great Britain and Ireland. The United Kingdom's 242,500 square kilometres (93,600 sq mi) were home to an estimated 66.0 million inhabitants in 2017.

Kingdom of England Historic sovereign kingdom on the British Isles (927–1649; 1660–1707)

The Kingdom of England was a sovereign state on the island of Great Britain from 927, when it emerged from various Anglo-Saxon kingdoms until 1707, when it united with Scotland to form the Kingdom of Great Britain.

Contents

The Bank became an independent public organisation in 1998, wholly owned by the Treasury Solicitor on behalf of the government, [4] but with independence in setting monetary policy. [5] [6] [7] [8]

The Bank is one of eight banks authorised to issue banknotes in the United Kingdom, has a monopoly on the issue of banknotes in England and Wales and regulates the issue of banknotes by commercial banks in Scotland and Northern Ireland. [9]

Banknotes of the pound sterling Promissory notes denominated in pounds sterling

Sterling banknotes are the banknotes in circulation in the United Kingdom and its related territories, denominated in pounds sterling.

England and Wales Administrative jurisdiction within the United Kingdom

England and Wales is a legal jurisdiction covering England and Wales, two of the four constituent countries of the United Kingdom. ’England and Wales’ forms the constitutional successor to the former Kingdom of England and follows a single legal system, known as English law.

Scotland Country in Northwest Europe, part of the United Kingdom

Scotland is a country that is part of the United Kingdom. It covers the northern third of the island of Great Britain, with a border with England to the southeast, and is surrounded by the Atlantic Ocean to the north and west, the North Sea to the northeast, the Irish Sea to the south, and more than 790 islands, including the Northern Isles and the Hebrides.

The Bank's Monetary Policy Committee has a devolved responsibility for managing monetary policy. 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. [10] The Bank's Financial Policy Committee held its first meeting in June 2011 as a macroprudential regulator to oversee regulation of the UK's financial sector.

Monetary Policy Committee Committee of the Bank of England that decides the United Kingdoms official interest rate

The Monetary Policy Committee (MPC) is a committee of the Bank of England, which meets for three and a half days, eight times a year, to decide the official interest rate in the United Kingdom.

Monetary policy subclass of the economic policy

Monetary policy is the policy adopted by the monetary authority of a country that controls either the interest rate payable on very short-term borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency.

The Financial Policy Committee (FPC) is an official committee of the Bank of England, modelled on the already well established Monetary Policy Committee. It was announced in 2010 as a new body responsible for monitoring the economy of the United Kingdom. Focusing on the macro-economic and financial issues that may threaten long term growth prospects, it was expected to be officially set out in legislation during 2012. Although early plans were for the interim (pre-legislation) FPC to meet in late 2010, the committee's first meeting was held in June 2011. As of March 2012, the FPC is expected to take over operational responsibility for managing the financial sector from the Financial Services Authority with legislation planned for 2013.

The Bank's headquarters have been in London's main financial district, the City of London, on Threadneedle Street, since 1734. It is sometimes known as The Old Lady of Threadneedle Street, a name taken from a satirical cartoon by James Gillray in 1797. [11] The road junction outside is known as Bank junction.

City of London City and county in United Kingdom

The City of London is a city and local government district that contains the historic centre and the primary central business district (CBD) of London. It constituted most of London from its settlement by the Romans in the 1st century AD to the Middle Ages, but the agglomeration has since grown far beyond the City's borders. The City is now only a tiny part of the metropolis of London, though it remains a notable part of central London. Administratively, it forms one of the 33 local authority districts of Greater London; however, the City of London is not a London borough, a status reserved for the other 32 districts. It is also a separate county of England, being an enclave surrounded by Greater London. It is the smallest county in the United Kingdom.

Threadneedle Street street in the City of London, London, England

Threadneedle Street is a street in the City of London, England between Bishopsgate at its northeast end and Bank junction in the southwest. It is one of nine streets that converge at Bank. It lies in the ward of Cornhill.

James Gillray British caricaturist and printmaker

James Gillray was a British caricaturist and printmaker famous for his etched political and social satires, mainly published between 1792 and 1810. Many of his works are held at the National Portrait Gallery in London.

As a regulator and central bank, the Bank of England has not offered consumer banking services for many years, but it still does manage some public-facing services such as exchanging superseded bank notes. [12] Until 2016, the bank provided personal banking services as a privilege for employees. [13]

History

Founding

Sealing of the Bank of England Charter (1694), by Lady Jane Lindsay, 1905 Bank of England Charter sealing 1694.jpg
Sealing of the Bank of England Charter (1694), by Lady Jane Lindsay, 1905

England's crushing defeat by France, the dominant naval power, in naval engagements culminating in the 1690 Battle of Beachy Head, became the catalyst for England rebuilding itself as a global power. England had no choice but to build a powerful navy. No public funds were available, and the credit of William III's government was so low in London that it was impossible for it to borrow the £1,200,000 (at 8% p.a.) that the government wanted.

To induce subscription to the loan, the subscribers were to be incorporated by the name of the Governor and Company of the Bank of England. The Bank was given exclusive possession of the government's balances, and was the only limited-liability corporation allowed to issue bank notes. [14] The lenders would give the government cash (bullion) and issue notes against the government bonds, which can be lent again. The £1.2m was raised in 12 days; half of this was used to rebuild the navy.

As a side effect, the huge industrial effort needed, including establishing ironworks to make more nails and advances[ clarification needed ] in agriculture feeding the quadrupled strength of the navy, started to transform the economy. This helped the new Kingdom of Great BritainEngland and Scotland were formally united in 1707 – to become powerful. The power of the navy made Britain the dominant world power in the late 18th and early 19th centuries. [15]

The establishment of the bank was devised[ clarification needed ] by Charles Montagu, 1st Earl of Halifax, in 1694. The plan of 1691, which had been proposed by William Paterson three years before, had not then been acted upon. [16] 58 years earlier, in 1636, Financier to the king, Philip Burlamachi, had proposed exactly the same idea in a letter addressed to Sir Francis Windebank. [17] 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 1694. [18] Public finances were in such dire condition at the time [19] 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 £4,000 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.

18th century

Satirical cartoon protesting against the introduction of paper money, by James Gillray, 1797. The "Old Lady of Threadneedle St" (the Bank personified) is ravished by William Pitt the Younger. The Old Lady of Threadneedle St.png
Satirical cartoon protesting against the introduction of paper money, by James Gillray, 1797. The "Old Lady of Threadneedle St" (the Bank personified) is ravished by William Pitt the Younger.

The Bank's original home was in Walbrook, a street in the City of London, where during reconstruction in 1954 archaeologists found the remains of a Roman temple of Mithras (Mithras is – rather fittingly – said to have been worshipped as, amongst other things, the God of Contracts); [20] the Mithraeum ruins are perhaps the most famous of all 20th-century Roman discoveries in the City of London and can be viewed by the public.

The Bank moved to its current location in Threadneedle Street in 1734, [21] and thereafter slowly acquired neighbouring land to create the site necessary for erecting the Bank's original home at this location, under the direction of its chief architect Sir John Soane, between 1790 and 1827. (Sir Herbert Baker's rebuilding of the Bank in the first half of the 20th century, demolishing most of Soane's masterpiece, was described by architectural historian Nikolaus Pevsner as "the greatest architectural crime, in the City of London, of the twentieth century".)

When the idea and reality of the national debt came about during the 18th century, this was also managed by the Bank. During the American war of independence, business for the Bank was so good that George Washington remained a shareholder throughout the period. [22] By the charter renewal in 1781 it was also the bankers' bank – keeping enough gold to pay its notes on demand until 26 February 1797 when war had so diminished gold reserves that – following an invasion scare caused by the Battle of Fishguard days earlier – the government prohibited the Bank from paying out in gold by the passing of the Bank Restriction Act 1797. This prohibition lasted until 1821.

19th century

Bank Stock of the Bank of England, issued 25. January 1876 Bank of England 1876.JPG
Bank Stock of the Bank of England, issued 25. January 1876

The 1844 Bank Charter Act tied the issue of notes to the gold reserves and gave the Bank sole rights with regard to the issue of banknotes. Private banks that had previously had that right retained it, provided that their headquarters were outside London and that they deposited security against the notes that they issued. A few English banks continued to issue their own notes until the last of them was taken over in the 1930s. Scottish and Northern Irish private banks still have that right.

The bank acted as lender of last resort for the first time in the panic of 1866. [23]

The last private bank in England to issue its own notes was Thomas Fox's Fox, Fowler and Company bank in Wellington, which rapidly expanded, until it merged with Lloyds Bank in 1927. They were legal tender until 1964. There are nine notes left in circulation; one is housed at Tone Dale House Wellington.

20th century

The main Bank of England facade Bank of England Building, London, UK - Diliff.jpg
The main Bank of England façade

Britain remained on the gold standard until 1931, when the gold and foreign exchange reserves were transferred to the Treasury; however, they continued to be managed by the Bank.

During the governorship of Montagu Norman, from 1920 to 1944, the Bank made deliberate efforts to move away from commercial banking and become a central bank. In 1946, shortly after the end of Norman's tenure, the bank was nationalised by the Labour government.

The Bank pursued the multiple goals of Keynesian economics after 1945, especially "easy money" and low interest rates to support aggregate demand. It tried to keep a fixed exchange rate, and attempted to deal with inflation and sterling weakness by credit and exchange controls. [24]

In 1977, the Bank set up a wholly owned subsidiary called Bank of England Nominees Limited (BOEN), a private limited company, with two of its hundred £1 shares issued. According to its Memorandum & Articles of Association, its objectives are: "To act as Nominee or agent or attorney either solely or jointly with others, for any person or persons, partnership, company, corporation, government, state, organisation, sovereign, province, authority, or public body, or any group or association of them...." Bank of England Nominees Limited was granted an exemption by Edmund Dell, Secretary of State for Trade, from the disclosure requirements under Section 27(9) of the Companies Act 1976, because "it was considered undesirable that the disclosure requirements should apply to certain categories of shareholders." The Bank of England is also protected by its royal charter status, and the Official Secrets Act. [25] BOEN is a vehicle for governments and heads of state to invest in UK companies (subject to approval from the Secretary of State), providing they undertake "not to influence the affairs of the company". [26] [27] BOEN is no longer exempt from company law disclosure requirements. [28] Although a dormant company, [29] dormancy does not preclude a company actively operating as a nominee shareholder. [30] BOEN has two shareholders: the Bank of England, and the Secretary of the Bank of England. [31]

The reserve requirement for banks to hold a minimum fixed proportion of their deposits as reserves at the Bank of England was abolished in 1981: see reserve requirement for more details. The contemporary transition from Keynesian economics to Chicago economics was analysed by Nicholas Kaldor in The Scourge of Monetarism [32]

On 6 May 1997, following the 1997 general election that brought a Labour government to power for the first time since 1979, it was announced by the Chancellor of the Exchequer, Gordon Brown, that the Bank would be granted operational independence over monetary policy. [33] Under the terms of the Bank of England Act 1998 (which came into force on 1 June 1998), the Bank's Monetary Policy Committee was given sole responsibility for setting interest rates to meet the Government's Retail Prices Index (RPI) inflation target of 2.5%. [34] The target has changed to 2% since the Consumer Price Index (CPI) replaced the Retail Prices Index as the Treasury's inflation index. [35] If inflation overshoots or undershoots the target by more than 1%, the Governor has to write a letter to the Chancellor of the Exchequer explaining why, and how he will remedy the situation. [36]

The success of inflation targeting in the United Kingdom has been attributed to the Bank's focus on transparency. [37] The Bank of England has been a leader in producing innovative ways of communicating information to the public, especially through its Inflation Report, which have been emulated by many other central banks. [38]

Independent central banks that adopt an inflation target are known as Friedmanite central banks. Inflation targets combined with central bank independence have been characterised as a "starve the beast" strategy creating a lack of money in the public sector. This change in Labour's politics was described by Skidelsky in The Return of the Master [39] as a mistake and as an adoption of the Rational Expectations Hypothesis as promulgated by Walters [40]

The handing over of monetary policy to the Bank had been a key plank of the Liberal Democrats' economic policy since the 1992 general election. [41] Conservative MP Nicholas Budgen had also proposed this as a private member's bill in 1996, but the bill failed as it had the support of neither the government nor the opposition.

21st century

Mark Carney assumed the post of Governor of the Bank of England on 1 July 2013. He succeeded Mervyn King, who took over on 30 June 2003. Carney, a Canadian, will serve an initial five-year term rather than the typical eight. He became the first Governor not to be a UK citizen, but has since been granted citizenship. [42] At Government request, his term was extended to 2019, then again to 2020. [43] As of January 2014, the Bank also has four Deputy Governors.

BOEN was dissolved, following liquidation, in July 2017. [44]

Functions

There are two main areas which are tackled by the Bank to ensure it carries out these functions efficiently: [45]

Bank House, the Bank of England offices on King Street in Leeds. Bank of England.jpg
Bank House, the Bank of England offices on King Street in Leeds.

Monetary stability

Note: It is important to note that "monetary" and "financial" are synonyms.

Stable prices and confidence in the currency are the two main criteria for monetary stability. Stable prices are maintained by seeking to ensure that price increases meet the Government's inflation target. The Bank aims to meet this target by adjusting the base interest rate, which is decided by the Monetary Policy Committee, and through its communications strategy, such as publishing yield curves. [46]

Maintaining financial stability involves protecting against threats to the whole financial system. Threats are detected by the Bank's surveillance and market intelligence functions. The threats are then dealt with through financial and other operations, both at home and abroad. In exceptional circumstances, the Bank may act as the lender of last resort by extending credit when no other institution will.

The Bank works together with other institutions to secure both monetary and financial stability, including:

The 1997 memorandum of understanding describes the terms under which the Bank, the Treasury and the FSA work toward the common aim of increased financial stability. [47] In 2010 the incoming Chancellor announced his intention to merge the FSA back into the Bank. As of 2012, the current director for financial stability is Andy Haldane. [48]

The Bank acts as the government's banker, and it maintains the government's Consolidated Fund account. It also manages the country's foreign exchange and gold reserves. The Bank also acts as the bankers' bank, especially in its capacity as a lender of last resort.

The Bank has a monopoly on the issue of banknotes in England and Wales. Scottish and Northern Irish banks retain the right to issue their own banknotes, but they must be backed one for one with deposits at the Bank, excepting a few million pounds representing the value of notes they had in circulation in 1845. The Bank decided to sell its banknote printing operations to De La Rue in December 2002, under the advice of Close Brothers Corporate Finance Ltd. [49]

Since 1998, the Monetary Policy Committee (MPC) has had the responsibility for setting the official interest rate. However, with the decision to grant the Bank operational independence, responsibility for government debt management was transferred in 1998 to the new Debt Management Office, which also took over government cash management in 2000. Computershare took over as the registrar for UK Government bonds (gilt-edged securities or gilts) from the Bank at the end of 2004.

The Bank used to be responsible for the regulation and supervision of the banking and insurance industries. This responsibility was transferred to the Financial Services Authority in June 1998, but after the financial crises in 2008 new banking legislation transferred the responsibility for regulation and supervision of the banking and insurance industries back to the Bank.

In 2011 the interim Financial Policy Committee (FPC) was created as a mirror committee to the MPC to spearhead the Bank's new mandate on financial stability. The FPC is responsible for macro prudential regulation of all UK banks and insurance companies.

To help maintain economic stability, the Bank attempts to broaden understanding of its role, both through regular speeches and publications by senior Bank figures, a semiannual Financial Stability Report, [50] and through a wider education strategy aimed at the general public. It currently maintains a free museum and ran the Target Two Point Zero competition for A-level students, closing in 2017. [51]

Asset purchase facility

The Bank has operated, since January 2009, an Asset Purchase Facility (APF) to buy "high-quality assets financed by the issue of Treasury bills and the DMO's cash management operations" and thereby improve liquidity in the credit markets. [52] It has, since March 2009, also provided the mechanism by which the Bank's policy of quantitative easing (QE) is achieved, under the auspices of the MPC. Along with the managing the £200 billion of QE funds, the APF continues to operate its corporate facilities. Both are undertaken by a subsidiary company of the Bank of England, the Bank of England Asset Purchase Facility Fund Limited (BEAPFF). [52]

Banknote issues

The Bank has issued banknotes since 1694. Notes were originally hand-written; although they were partially printed from 1725 onwards, cashiers still had to sign each note and make them payable to someone. Notes were fully printed from 1855. Until 1928 all notes were "White Notes", printed in black and with a blank reverse. In the 18th and 19th centuries White Notes were issued in £1 and £2 denominations. During the 20th century White Notes were issued in denominations between £5 and £1000.

Until the mid-19th century, commercial banks were allowed to issue their own banknotes, and notes issued by provincial banking companies were commonly in circulation. [53] The Bank Charter Act 1844 began the process of restricting note issue to the Bank; new banks were prohibited from issuing their own banknotes and existing note-issuing banks were not permitted to expand their issue. As provincial banking companies merged to form larger banks, they lost their right to issue notes, and the English private banknote eventually disappeared, leaving the Bank with a monopoly of note issue in England and Wales. The last private bank to issue its own banknotes in England and Wales was Fox, Fowler and Company in 1921. [54] [55] However, the limitations of the 1844 Act only affected banks in England and Wales, and today three commercial banks in Scotland and four in Northern Ireland continue to issue their own banknotes, regulated by the Bank. [9]

At the start of the First World War, the Currency and Bank Notes Act 1914 was passed, which granted temporary powers to HM Treasury for issuing banknotes to the values of £1 and 10/- (ten shillings). Treasury notes had full legal tender status and were not convertible into gold through the Bank; they replaced the gold coin in circulation to prevent a run on sterling and to enable raw material purchases for armament production. These notes featured an image of King George V (Bank of England notes did not begin to display an image of the monarch until 1960). The wording on each note was:

UNITED KINGDOM OF GREAT BRITAIN AND IRELAND – Currency notes are Legal Tender for the payment of any amount – Issued by the Lords Commissioners of His Majesty's Treasury under the Authority of Act of Parliament (4 & 5 Geo. V c.14).

Treasury notes were issued until 1928, when the Currency and Bank Notes Act 1928 returned note-issuing powers to the banks. [56] The Bank of England issued notes for ten shillings and one pound for the first time on 22 November 1928.

During the Second World War the German Operation Bernhard attempted to counterfeit denominations between £5 and £50, producing 500,000 notes each month in 1943. The original plan was to parachute the money into the UK in an attempt to destabilise the British economy, but it was found more useful to use the notes to pay German agents operating throughout Europe. Although most fell into Allied hands at the end of the war, forgeries frequently appeared for years afterwards, which led banknote denominations above £5 to be removed from circulation.

In 2006, over £53 million in banknotes belonging to the Bank was stolen from a depot in Tonbridge, Kent. [57]

Modern banknotes are printed by contract with De La Rue Currency in Loughton, Essex. [58]

Gold vault

The bank is custodian to the official gold reserves of the United Kingdom and around 30 other countries. The vault, beneath the City of London, covers a floor space greater than that of the fourth-tallest building in the City, Tower 42, and needs keys that are three feet (0.91 m) long to open. [59] As of April 2016, the bank held around 400,000 bars, which is equivalent to 5,134 tonnes (5,659 tons) of gold. [60] These gold deposits were estimated in August 2018 to have a current market value of approximately £200 billion. [61] These estimates suggest the vault could hold as much as 3% of the gold mined throughout human history. [62]

Governance of the Bank of England

Governors

Following is a list of the Governors of the Bank of England since the beginning of the 20th century: [63]

NamePeriod
Samuel Gladstone 1899–1901
Augustus Prevost 1901–1903
Samuel Morley 1903–1905
Alexander Wallace 1905–1907
William Campbell 1907–1909
Reginald Eden Johnston 1909–1911
Alfred Cole 1911–1913
Walter Cunliffe 1913–1918
Brien Cokayne 1918–1920
Montagu Norman 1920–1944
Thomas Catto 1944–1949
Cameron Cobbold 1949–1961
Rowland Baring (3rd Earl of Cromer) 1961–1966
Leslie O'Brien 1966–1973
Gordon Richardson 1973–1983
Robert Leigh-Pemberton 1983–1993
Edward George 1993–2003
Mervyn King 2003–2013
Mark Carney 2013–

Court of Directors

The Court of Directors is a unitary board that is responsible for setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. It consists of five executive members from the Bank plus up to 9 non-executive members, all of whom are appointed by the Crown. The Chancellor selects the Chairman of the Court from among one of the non-executive members. The Court is required to meet at least 7 times a year. [64]

The Governor serves for a period of eight years, the Deputy Governors for five years, and the non-executive members for up to four years.

Court of Directors (2019) [65]
NameFunction
Bradley Fried Chairman of Court. Managing Partner of Grovepoint Capital LLP
Mark CarneyGovernor
Benjamin Broadbent Deputy Governor, Monetary Policy
Sir Jon Cunliffe Deputy Governor, Financial Stability
Sam Woods Deputy Governor, Prudential Regulation & Chief Executive of the Prudential Regulation Authority
Sir David Ramsden Deputy Governor, Markets and Banking
Anne Glover Chief Executive and Co-Founder of Amadeus Capital Partners
Diana NobleNon-Executive Director
Diana 'Dido' Harding Member of the House of Lords
Dave PrentisGeneral Secretary of UNISON
Don RobertChairman, Experian plc
Dorothy Thompson Chair of Tullow Oil plc,
Ron KalifaBoard Director of Worldpay and Chairman of Network International
Frances O'Grady General Secretary of the British Trades Union Congress
Hanneke SmitsCEO of Newton Investment Management

Other staff

Since 2013, the Bank has had a chief operating officer (COO). [66] As of 2015, the Bank's COO has been Charlotte Hogg. [67]

As of 2014, the Bank's chief economist is Andrew Haldane. [68]

Criticism

Representing the Bullionist perspective, Economist David Ricardo argued that the Bank of England caused inflation and depreciation of the pound by over-issuing banknotes to purchase government securities because of the 1797 suspension of convertibility of pound into specie. The convertibility was suspended to prevent widespread conversion of banknotes into specie as the likelihood of war between England and France grew and fears of a French invasion increased. Before 1797, banknotes issued by the Bank of England were required to be convertible into specie. [69] In the end, Ricardo won with his recommendation to return to convertibility to prevent further conflicts and to ensure price stability. The suspension remained in effect until 1821. After convertibility was reinstated in 1821, the discussion shifted to the Currency-Banking Controversy.

See also

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The Bank of Albania is the central bank of Albania. Its main headquarters are in Tirana, and the bank also has five other branches located in Shkodër, Elbasan, Gjirokastër, Korçë, and Lushnjë.

Central Bank of Ecuador

The Central Bank of Ecuador is the central bank of Ecuador.

National Bank of the Kyrgyz Republic central bank

The National Bank of the Kyrgyz Republic is the central bank of Kyrgyzstan and is primarily responsible for the strategic monetary policy planning of the country as well as the issuance of the national currency, the Som.

This article is about the history of monetary policy in the United States. Monetary policy is associated with interest rates and availability of credit.

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Further reading