Kavan Choksi UK Discusses Some of the Major Responsibilities of the Bank of England

The Bank of England is the central bank of the United Kingdom. Its mission is to promote the good of the people by maintaining financial and monetary stability of the country. As per Kavan Choksi UK, the Bank of England or BoE has had statutory responsibility for setting the official interest rate of the country since 1997. The BoE’s Monetary Policy Committee are the ones responsible for making interest rate decisions.
Kavan Choksi UK provides insights into some of the major responsibilities of the Bank of England
One of the most important responsibilities of the BoE is to design and print banknotes. Only the Bank of England can issue banknotes in England and Wales. There, however, are seven commercial banks that can issue banknotes in Scotland and Northern Ireland. BoE strives to make sure that people have confidence in the currency, and therefore include the latest anti-forgery features in the banknotes. The BoE often provides educational resources and training to help people identify fake notes. UK’s central bank issued a new £5 note in September 2016, which was its first banknote made from polymer. Polymer is a flexible and thin plastic material. Polymer notes are not only harder to forge, but are also usually cleaner and longer lasting in comparison to paper notes. Over time, the BoE has also issued polymer £10 and £20 notes as well.
The Bank of England is responsible for keeping the economy of the United Kingdom on the right track. They do so with the help of monetary policy. The BoE operates monetary policy by moving the interest rate or the Bank Rate up and down. In certain cases, this move is supplemented with measures like quantitative easing. As Kavan Choksi UK mentions, decisions on monetary policy are made by BoE’s Monetary Policy Committee (MPC) eight times a year.
The BoE puts emphasis on making sure that the financial system of the United Kingdom is safe and sound. They offer a range of critical services to the real economy in both good and bad times. The Financial Policy Committee (FPC) of the BoE strives to identify and monitor risks in the financial system. They subsequently take action to lower or remove risk when necessary. The BoE can provide possible liquidity support to financial institutions struggling to secure access to adequate funds.
Payments have an important role to play in the functioning of the economy. The BoE acts somewhat like a settlement agent for banks and others who are members of diverse payment systems. Every day the BoE settles several million worth of payments between banks. These transactions span almost every payment in the UK economy, starting from salaries, pensions and company invoices to coffee sales, car purchases and investment flows. The BoE also tends to settle the net interbank transfers for multiple retail and card systems. Basically, the UK’s central bank provides a safe, risk-free means for banks to transfer funds from one another. This helps lower the risk for everyone involved and promotes financial stability.