Bank Of England Functions Of The Bank History Banknote Issues

It performs all the recognized functions of a central bank -- to maintain price stability, and subject to that, to support the economic policy of Her Majesty's Government ( Bank of England Act 1998 ). It has a monopoly on the issue of banknotes in England and Wales (see Sterling); it is both the Government's banker and the bankers' bank; a "Lender of Last Resort"; it manages the country's foreign exchange and gold reserve s and the Government's stock register; it used to be responsible for the regulation and supervision of the banking industry (see Johnson Matthey , BCCI, and Barings), although this responsibility was transferred to the Financial Services AuthorityThe United Kingdom Financial Services Authority (FSA) is an independent non-governmental body that regulates the UK financial services industry. The FSA was created by the UK chancellor of the exchequer on May 20, 1997, and given statutory powers on Decem in June 19981998 was a common year starting on Thursday (see link for calendar), and was designated the International Year of the Ocean''. Events January January 1998 A massive ice storm, caused by El Nino, strikes New England, southern Ontario and Quebec, resulting. Since 19971997 was a common year starting on Wednesday (see link for calendar), and was designated the International Year of the Reef''. Events January January 3 NBC's Today Show Bryant Gumbel signs off for the last time January 8 Mister Rogers receives a star on t the Monetary Policy Committee has had the responsibility for setting the official interest rateAn interest rate is the 'rental' price of money. When a resource or asset is borrowed, the borrower pays the lender for the use of it. The interest rate is the price paid for the use of money for a period of time. One type of interest rate is the yield on. ScottishScotland or in Scottish Gaelic, Alba is a country and former independent kingdom of northwest Europe, and one of the four nations comprising the United Kingdom. Scotland occupies the northern third of the island of Great Britain. Scotland took part in a p and Northern IrishNorthern Ireland is the smallest of the Home Nations of the United Kingdom of Great Britain and Northern Ireland. Northern Ireland lies in the north-east of the island of Ireland. It covers 14,139 square kilometres (5,459 square miles), and has a populati banks retain the right to issue their own banknotes, but they must be backed one to one with deposits in the Bank of England, excepting a few million pounds representing the value of notes they had in circulation in 1845Events January 29 The Raven by Edgar Allan Poe is published for the first time New York Evening Mirror . March 1 President John Tyler signs a bill authorizing the United States to annex the Republic of Texas. March 3 Florida is admitted as the 27th U.. It maintains the Government's Consolidated FundThe Consolidated Fund is the British government's central bank account, held at the Bank of England. Several Consolidated Fund Acts are passed by Parliament during each session allowing the government to draw money from the fund to finance public services account.

2 History

The bank was founded along with the Bank of Scotland by William Paterson in 1694 to act as the English Government's banker; the Bank of Scotland was to be the Scottish Government's banker. 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 banking privileges including the issue of notes. The Royal Charter was granted on July 27, 1694. Public finances were in so dire a condition at the time 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 £4000 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. In 1734 the Bank moved to its current location on Threadneedle Street, slowly acquiring the land to create the edifice seen today.

When the idea and reality of the National Debt came about during the 18th century this was also managed by the bank. By the charter renewal in 1781 it was also the bankers' bank - keeping enough gold to pay its notes on demand until February 26, 1797 when war had so diminished gold reserves that the Government prohibited the Bank from paying out in gold. This lasted until 1821.

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 which 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. The Scottish and Northern Irish private banks still have that right. Britain remained on the gold standard until 1931 when the gold and foreign exchange reserves were transferred to the Treasury. But their management was still handled by the Bank. In 1870 the Bank was given responsibility for interest rate policy.

During the governorship of Montagu Norman, which lasted 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.

The nearest London Underground station, and thus a busy commuter stop, is Bank station.

In 1997 the bank's Monetary Policy Committee was given sole responsibility for setting interest rates to meet the Government's stated inflation target of 2.5%. This decision was taken by the Chancellor of the Exchequer, Gordon Brown immediately following the 1997 general election. However the idea was originally that of Conservative MP Nicholas Budgen who proposed it as a Private Members Bill in 1996, the bill failed as it had neither the support of the government or the opposition. The act of 1997 is almost verbatim what Budgen proposed in 1996. Should inflation miss the target by over 1%, the governor would have write a letter to the Chancellor of the Exchequer explaining why and how he would remedy the situation. This was an astute move for several reasons;

it removed the polically controversial responsibility from the government
it was very popular with the City of London, showing a sign of the new governments desire for a strong economy
- Following the announcement the FTSE 100 leapt rapidly and,
- the Pound reached its highest level against the Deutschmark since Sterling's exit from the ERM

3 Banknote issues

The Bank of England 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, no doubt to the relief of the banks' workers. Until 1928 all notes were "White Notes", printed in black and with a blank reverse. During the 20th century White Notes were issued in denominations between £5 and £1000, but in the 18th and 19th centuries there were White Notes for £1 and £2. In the twentieth century, the Bank issued notes for ten shillings and one pound for the first time on 22 November 1928 when the Bank took over responsibility for these denominations from the Treasury which had issued notes of these denominations three days after the declaration of war in 1914 in order to remove gold coins from circulation.

During the Second World War the German Operation Bernhard attempted to counterfeit various denominations between £5 and £50 in an attempt to destabilise the British economy, producing 500,000 notes each month in 1943 -- although most fell into Allied hands at the end of the war, forgeries were frequently appearing for years afterward, so all denominations of banknote above £5 were subsequently removed from circulation.

All old Bank of England notes remain exchangeable for current notes forever. Notes can either be taken in person to the Bank in London during normal business hours, or sent by post at the sender's risk to:

Exchanges,

Custodial Services,

Threadneedle Street,

London EC2R 8AH

3.1 10/-

The Bank of England's first ever ten shilling note was issued on 22 November 1928. This note featured a vignette of Britannia, a feature of the Bank's notes since 1694. The predominant colour was red-brown. Unlike previous notes it, and the contemporaneous £1 note, were not dated but are instead identified by the signature of the Chief Cashier of the time. In 1940 a metal security thread was introduced for the first time, and the colour of the note was changed to mauve for the duration of the war. The original design of the note was replaced by the "Series C" design in 1960, when Queen Elizabeth agreed to allow the use of her portrait on the notes. The ten shilling note was withdrawn following the introduction in 1969 of the fifty pence coin.

3.2 £1

The Bank of England's first one pound note since 1845 was issued on 22 November 1928. This note featured a vignette of Britannia, a feature of the Bank's notes since 1694. The predominant colour was green. Unlike previous notes it, and the contemporaneous ten shilling note, were not dated but are instead identified by the signature of the Chief Cashier of the time. In 1940 a metal security thread was introduced for the first time, and the colour of the note was changed to pink for the duration of the war. The original design of the note was replaced by the "Series C" design in 1960, when Queen Elizabeth agreed to allow the use of her portrait on the notes. In 1977 the "Series D" design (known as the "Pictorial Series") featuring Sir Isaac Newton on the reverse was issued, but following the introduction in 1983 of the One Pound coin, the note was withdrawn from circulation in 1988.

3.3 £5

The first Bank of England £5 note was issued in 1793 in response to the need for smaller denomination banknotes to replace gold coin during the French Revolutionary Wars (previously the smallest note issued had been £10). The 1793 design, latterly known as the "White Fiver" (black printing on white paper), remained in circulation essentially unchanged until 1957 when the multicoloured (although predominantly dark blue) "Series B" note, depicting the helmeted Britannia was introduced. This note was replaced in turn in 1963 by the "Series C" £5 note which for the first time introduced the portrait of the monarch, Queen Elizabeth II, to the £5 note (the Queen's portrait having first appeared on the Series C ten shilling and one pound notes issued in 1960). In 1971 the "Series D" pictorial £5 note was issued, showing a slightly older portrait of the Queen and a battle scene featuring the Duke of Wellington on the reverse. On 7 June 1990 the "Series E" £5 note, by now the smallest denomination issued by the Bank, was issued. The Series E note (known as the "Historical Series") changed the colour of the denomination to a turquoise blue, and incorporated design elements to make photocopying and computer reproduction of the notes more difficult. Initially the reverse of the Series E £5 note featured the railway engineer George Stephenson, but on 21 May 2002 a new Series E note was produced featuring the prison reformer Elizabeth Fry. The original issue of the Fry banknote was withdrawn after it was found the ink on the serial number could be rubbed off the surface of the note. The Stephenson £5 note was withdrawn as legal tender from 21 October 2003, at which time it formed around 54 million of the 211 million £5 notes in circulation.

3.4 £10

The first ten pound note was issued in 1759, when the Seven Years War caused severe gold shortages. Following the withdrawal of the denomination after the Second World War, it was not reintroduced until the Series C design of the mid 1960s produced the brown ten pound note. The Series D pictorial note appeared in the early 1970s, featuring nurse Florence Nightingale (1820-1910) on the reverse, plus a scene showing her work at the army hospital in Scutari during the Crimean War. This note was subsequently replaced in the early 1990s by the Series E note, where the predominant colour was changed from brown to orange. The reverse of the first Series E £10 featured Charles Dickens and a scene from the Pickwick Papers (this note was withdrawn from circulation in July 2003), while a second Series E note was issued in 2000 featuring Charles Darwin, the HMS Beagle, a hummingbird, and flowers under a magnifying glass, illustrating the Origin of Species. (It is a feature of the series E notes that the people illustrated on the reverse all either have luxuriant beards or extravagant hairstyles, to make copying more difficult).

3.5 £20

After the Second World War, the £20 denomination did not reappear until Series D in the early 1970s. The predominant colour of this denomination is purple. The reverse of the Series D £20 features a statue of William Shakespeare and the balcony scene from Romeo and Juliet. In 1992 this note was replaced by the first Series E note, featuring the physicist Michael Faraday and the Royal Institution lectures. By 1999 this note had been extensively copied, and therefore it became the first denomination to be replaced by a second Series E design, featuring a bolder denomination figure at the top left of the obverse side, and a reverse side featuring the composer Sir Edward Elgar and Worcester Cathedral.

3.6 £50

The fifty pound denomination, much beloved of second hand car and antique dealers, did not reappear until 1981 when a Series D design was issued featuring the architect Christopher Wren and the plan of Saint Pauls' Cathedral on the reverse of this large note. In 1990 this denomination saw the start of the Series E issue, when the Bank commemorated its own impending tercentenary by putting its first governor, Sir John Houblon on the reverse. The series E £50 saw the first use on Bank of England notes of a hologram on the note, a practice which has been extended to all the Banks' notes with the second issue of Series E notes.

4 Chief Cashiers of the Bank of England 1694-2004

John Kendrick 1694
Thomas Speed 1694 - 1699
James Collier 1739 - 1751
Ellas Simes 1751 - 1759
Daniel Race 1759 - 1775
Charles Jewson 1775 - 1778
Abraham Newland 1778 - 1807
Henry Hase 1807 - 1829
Thomas Rippon 1829 - 1835
Matthew Marshall 1829 - 1835
William Miller 1864 - 1866
George Forbes 1866 - 1873
Frank May 1873 - 1893
Horace George Bowen 1893 - 1902
John Gordon Nairne 1902 - 1918
Ernest Musgrave Harvey 1918 - 1925
C.P. Mahon 1925 - 1930
B.G. Catterens 1930 - 1934
K.O. Peppiatt 1934 - 1950
P.S. Beale 1950 - 1955
L.K. O'Brien 1955 - 1962
J.Q. Hollom 1962 - 1967
J.S. Fforde 1967 - 1971
J.B. Page 1971 - 1980
D.H.F. Somerset 1980 - 1988
G.M. Gill 1988 - 1992
G.E.A. Kentfield 1992 - 1999
Merlyn Lowther 1999 - 2003 (first woman to hold the post)
Andrew Bailey 2004 -

5 Governors of the Bank of England 1694-2003

Sir John Houblon (1694-1697)
Sir William Scawen (1697-1699)
Nathaniel Tench (1699-1701)
John Ward (1701-1703)
Abraham Houblon (1703-1705)
Sir James Bateman (1705-1707)
Francis Eyles (1707-1709)
Sir Gilbert Heathcote (1709-1711)
Nathaniel Gould (1711-1713)
John Rudge (1713-1715)
Sir Peter Delme (1715-1717)
Sir Gerard Conyers (1717-1719)
John Hanger (1719-1721)
Sir Thomas Scawen (1721-1723)
Sir Gilbert Heathcote (1723-1725)
William Thompson (1725-1727)
Humphry Morice (1727-1729)
Samuel Holden (1729-1731)
Sir Edward Bellamy (1731-1733)
Horatio Townshend (1733-1735)
Bryan Benson (1735-1737)
Thomas Cooke (1737-1740)
Delillers Carbonnel (1740-1741)
Stamp Brooksbank (1741-1743)
William Fawkener (1743-1745)
Charles Savage (1745-1747)
Benjamin Longuet (1747-1749)
William Hunt (1749-1752)
Alexander Sheafe (1752-1754)
Charles Palmer (1754-1756)
Matthews Beachcroft (1756-1758)
Merrik Burrell (1758-1760)
Bartholomew Burton (1760-1762)
Robert Marsh (1762-1764)
John Weyland (1764-1766)
Matthew Clarmont (1766-1769)
William Cooper (1769-1771)
Edward Payne (1771-1773)
James Sperling (1773-1775)
Samuel Beachcroft (1775-1777)
Peter Gaussen (1777-1779)
Daniel Booth (1779-1781)
William Ewer (1781-1783)
Richard Neave (1783-1785)
George Peters (1785-1787)
Edward Darell (1787-1789)
Mark Weyland (1789-1791)
Samuel Bosanquet (1791-1793)
Godfrey Thornton (1793-1795)
Daniel Giles (1795-1797)
Thomas Raikes (1797-1799)
Samuel Thornton (1799-1801)
Job Mathew (1801-1802)
Joseph Nutt (1802-1804)
Benjamin Winthrop (1804-1806)
Beeston Long (1806-1808)
John Whitmore (1808-1810)
John Pearse (1810-1812)
William Manning (1812-1814)
William Mellish (1814-1816)
Jeremiah Harman (1816-1818)
George Dorrien (1818-1820)
Charles Pole (1820-1822)
John Bowden (1822-1824)
Cornelius Buller (1824-1826)
John Baker Richards (1826-1828)
Samuel Drewe (1828-1830)
John Horsley Palmer (1830-1833)
Richard Mee Raikes (1833-1834)
James Pattison (1834-1837)
Timothy Abraham Curtis (1837-1839)
Sir John Rae Reid (1839-1841)
Sir John Henry Pelly (1841-1842)
William Cotton (1842-1845)
John Benjamin Heath (1845-1847)
William Robinson Robinson (April 1847-August 1847)
James Morris (1847-1849)
Henry James Prescot (1849-1851)
Thomson Hankey (1851-1853)
John Gellibrand Hubbard (1853-1855)
Thomas Matthias Weguelin (1855-1857)
Sheffield Neave (1857-1859)
Bonamy Dobree (1859-1861)
Alfred Latham (1861-1863)
Kirkman Daniel Hodgson (1863-1865)
Henry Lancelot Holland (1865-1867)
Thomas Newman Hunt (1867-1869)
Robert Wigram Crawford (1869-1871)
George Lyall (1871-1873)
Benjamin Buck Greene (1873-1875)
Henry Hucks Gibbs (1875-1877)
Edward Howley Palmer (1877-1879)
John William Birch (1879-1881)
Henry Riversdale Grenfell (1881-1883)
John Saunders Gilliat (1883-1885)
James Pattison Currie (1885-1887)
Mark Wilks Collet (1887-1889)
William Lidderdale (1889-1892)
David Powell (1892-1895)
Albert George Sandeman (1895-1897)
Hugh Colin Smith (1897-1899)
Samuel Steuart Gladstone (1899-1901)
Augustus Prevost (1901-1903)
Samuel Hope Morley (1903-1905)
Alexander Falconer Wallace (1905-1907)
William Middleton Campbell (1907-1909)
Reginald Eden Johnston (1909-1911)
Alfred Clayton Cole (1911-1913)
Walter Cunliffe, Baron Cunliffe (1913-1918)
Sir Brien Ibrican Cokayne (1918-1920)
Montagu Collet Norman (1920-1944)
Thomas Sivewright Catto, Baron Catto of Cairncatto (1944-1949)
Cameron Fromanteel Cobbold, 1st Baron Cobbold of Knebworth (March 1949-30 June 1961)
George Rowland Stanley Baring, 3rd Earl of Cromer (1 July 1961-1966)
Sir Leslie O'Brien (1966-1973)
Gordon Richardson (1973-1983)
Robin Leigh-Pemberton (1983-1993)
Sir Edward George (1993-30 June 2003)
Mervyn King (1 July 2003-)

6 See also

7 External link

United Kingdom Banks of the United Kingdom England

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1 Functions of the bank