Do you know Bank of England? Every country always strives to exercise complete control over its economic and financial conditions. So to support this it is not surprising if in a country there is a government-owned bank. One of them is also in the United Kingdom, where the government of the country established a national central bank called the Bank of England.
Of course, behind the formation of the bank, there are several important functions carried out, especially to support the economic stability of British society itself. So that as a government-owned bank, the responsibilities, and functions of the bank are quite large.
It’s just that not many understand what the task is carried out by this one bank. So to help provide this information, here are some explanations about the functions of the Bank of England.
Bank of England Responsible for British Monetary Stability
In keeping with its history that the Bank of England began in the 18th century, its first appearance was expected to help provide better economic stability. Although it had a long journey before it actually officially became a bank owned by the British government, the establishment of this bank from the beginning managed to bring a positive influence on British society itself.
Proven until the 21st century where the journey of progress from the bank delivers significant results. So that the financial condition in the UK can run well and be stable. This is in line with the main function of the bank established in the UK to ensure domestic financial stability. This includes ensuring the stability of all financial transaction activities taking place within the UK itself.
Through the control system that the Bank of England applies to other banks in the UK, of course, this becomes one of the main parameters of the success of the bank’s function in maintaining financial stability and the country’s economy.
Indirectly, it is this success that determines whether the welfare of a country is guaranteed or not. And this is what the bank does in carrying out one of its functions to maintain financial stability.
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This is done by, among other things, reducing the rate of inflation. In addition, by arranging the amount of interest on each bank to be equal and balanced. In addition, the bank is also responsive in issuing various important policies that can affect the economic condition of the country. One of them is during the spread of the Covid-19 virus that requires adequate economic handling in each country. Including in England itself.
Bank of England Managed British Asset Purchase Facility
The next function of the Bank of England is to regulate asset purchase facilities in every sector in the UK. Of course, this is related to strategic assets related to state assets. In order to continue to ensure the welfare of the people of the British state.
Therefore, the bank is trying to properly carry out its functions and duties in this field, namely by arranging purchases and financial funds for classy assets in the country. This has been going on since 2009 where it is done through the Asset Purchase Facility division formed within the British-owned bank.
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In practice, this function is carried out by supervising all-important asset purchase activities in the UK. Including looking at the source of financing and doing its endorsement. So in this way, the British-owned bank becomes a good control to avoid the transaction of illegal assets and those that are dangerous for the condition of state stability.
Bank of England Issuing Bank Notes
Functional follow from the Bank of England as well as the function played by most state-owned banks, namely issuance banknotes. Banknotes are important to ensure the ability of a bank in doing something or important financial transactions. Without this evidence, a bank will not be able to perform an important transaction.
Therefore of course the guarantee of this is issued by the party with the highest authority which in this case is the Bank of England. So that at least the supervision of every other bank in the UK can be done centrally by the Bank owned by the United Kingdom.
This also can do through the issuance of banknotes for other banks in England. Through this function, it can help to guarantee another bank in England. Whether the bank is trustable or not. So that any new customer or investor will not doubt their decision and mind.
That is some little information about the functioning of the Bank of England. As a bank with a long history in the UK, it is certainly not easy to exercise control and supervision as stated above. However, from time to time this British government-owned bank managed to show amazing results among the country itself.
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With the existence of the bank, it is proven that the economy of the British people is running well and quite stable. Investment turnover can also be well controlled. So it is not surprising that Britain managed to become one of the prosperous countries in the world with much better economic conditions than most other countries in the world.