The Bank of England is the central bank of the United Kingdom. Historically, it has been a model for banks all over the world. It was first established in 1694 to act as the English Government banker. The bank was moved to Thread needle Street in 1734, which is situated in the city of London.
The Bank of England was nationalised on 1 March 1946, and gained independence in 1997. Being the central bank, it forms a base for the financial systems in England. The bank is responsible for many functions, mainly ensuring economic stability throughout the country. Its first function is to draft the monetary policy and ensure price stability as economic conditions are very dependent on the currency fluctuations. It is important to keep inflation in check and ensure suitable interest rates in the economy.
Another important role of the Bank of England is that in critical times it lends money to other banks thus, taking them out of the difficult economic situation. If any bank of the country is on the verge of economic deterioration, the Bank of England lends money due to which the bank is prevented from undergoing bankruptcy. Hence, the economic conditions become stable due to this strategy.
The Bank of England comprises gold reserves as insurance, and its value is nearly 4 billion. These gold reserves are held with this bank for over 300 years. In 1999, major part of these gold reserves was sold off in order to improve the bank reputation in the country. This has also helped in increasing the currency storage of the bank. Moreover, nearly 400 tonnes of gold were auctioned in this regard.
In 2007, the bank ran into trouble regarding its gold reserves and this news made the headlines. It admitted that cracks and fissures were found in some of its gold. It was determined that the deterioration would temporarily reduce the value of the gold, making it more difficult to sell. Gold was held by the bank in the shape of bars as well as coins.
Due to such a difficult condition, it became nearly impossible to sell gold in the market. The Bank of England, being the main bank, affects the whole economic condition of the country to a greater extent. The gold rates were on the peak due to the increase in its demand.
Due to the deterioration of gold, the price was greatly reduced. As a result, many investors suffered loss of money. The gold was sold at relatively lower rates because of the poor quality of gold.
Due to this act, the Bank of England had to face a lot of criticism as this action was supposed to destroy the economy of the entire world for the upcoming years. It caused a loss of nearly 3.8 billion pounds but due to a good standing of this bank, this loss was overcome in short interval of time. - 29871
The Bank of England was nationalised on 1 March 1946, and gained independence in 1997. Being the central bank, it forms a base for the financial systems in England. The bank is responsible for many functions, mainly ensuring economic stability throughout the country. Its first function is to draft the monetary policy and ensure price stability as economic conditions are very dependent on the currency fluctuations. It is important to keep inflation in check and ensure suitable interest rates in the economy.
Another important role of the Bank of England is that in critical times it lends money to other banks thus, taking them out of the difficult economic situation. If any bank of the country is on the verge of economic deterioration, the Bank of England lends money due to which the bank is prevented from undergoing bankruptcy. Hence, the economic conditions become stable due to this strategy.
The Bank of England comprises gold reserves as insurance, and its value is nearly 4 billion. These gold reserves are held with this bank for over 300 years. In 1999, major part of these gold reserves was sold off in order to improve the bank reputation in the country. This has also helped in increasing the currency storage of the bank. Moreover, nearly 400 tonnes of gold were auctioned in this regard.
In 2007, the bank ran into trouble regarding its gold reserves and this news made the headlines. It admitted that cracks and fissures were found in some of its gold. It was determined that the deterioration would temporarily reduce the value of the gold, making it more difficult to sell. Gold was held by the bank in the shape of bars as well as coins.
Due to such a difficult condition, it became nearly impossible to sell gold in the market. The Bank of England, being the main bank, affects the whole economic condition of the country to a greater extent. The gold rates were on the peak due to the increase in its demand.
Due to the deterioration of gold, the price was greatly reduced. As a result, many investors suffered loss of money. The gold was sold at relatively lower rates because of the poor quality of gold.
Due to this act, the Bank of England had to face a lot of criticism as this action was supposed to destroy the economy of the entire world for the upcoming years. It caused a loss of nearly 3.8 billion pounds but due to a good standing of this bank, this loss was overcome in short interval of time. - 29871
About the Author:
Jack Wagon is a gold investment expert. You can buy pure gold bars and get complete information about buying gold bars at his recommended website at http://www.goldmadesimple.com/.
