According to Robert Peel's Act (1844), the Bank of England should publish its weekly balance. After the nationalization of the Bank was also publish an annual report on its activities, and in 1961 - a quarterly newsletter. The balance of the Bank of England is divided into two parts in accordance with the Act, introduced by Robert Peel, - the division of the Bank into two departments (Issue and Banking), which serves the purpose of accounting.
Emission accounts department related only to the issue of banknotes and their provision, net profit of the department shall be transferred to the National Fund loans. The rest of the Bank of England is reflected in the accounts of the Banking Department, profit from it is transmitted every six months treasury. Bottom Emission department consists of two articles: "Banknotes in circulation" and "Banknotes in the Banking Department." Issued equity department that bills are passed to the Banking Department, where they lie in reserve as long as customers do not need.
Note issue entirely fiduciary, ie not secured by gold, and the various obligations that are reflected in the asset Issuing department. The first article of the asset - "Government Obligations", it consists of mostly government bonds and treasury bills. The second article of the asset - "Other liabilities" - includes commercial paper, obligations of local authorities, as well as promissory notes to refinance export credits and loans shipbuilders. The first article of liability Banking Department - "Provisions and other accounts", it includes: equity capital of the Bank of England (since 1844 is continuing in the amount of 14.5 million pounds.
Cent.), The accounts of foreign central banks, the International Monetary Fund, the International Bank for Reconstruction and Development. Other articles liability - "Government deposits" and "Deposits from banks".
On the credit balance of the Banking Department, stated "Government Obligations" (which includes treasury bills and government bonds, which do not serve as collateral for the issue of notes), "User notes", "Loans". The assets also kept a reserve notes received from the Issuing Department, as well as small coins purchased by the Bank of England at the Treasury. The key role of the Bank of England's credit system arises from the fact that it is emission-cash center of the country. Bank of exercise a monopoly on the issue of banknotes.
Its liabilities (in the form of banknotes, and in the form of deposits from other banks) are the monetary base, the entire credit system. Any bank considers deposits in the Bank of England as a cash reserve, as in the case of necessity he can always withdraw money from an account in the Bank. Reducing or expanding the scope of its obligations, the Bank of England affect the value of cash reserves of the banks and the money supply in circulation. Bank of England - the government's adviser on monetary policy and its conductor.
After the war, he used almost all of the basic techniques of monetary policy (both general and selective). In the 1940s. monetary policy in accordance with Keynesian prescriptions viewed as a complement to the financial and aimed mainly at the maximum price reduction of public debt: a policy of "cheap" money.
In the 1950-1960-ies. monetary policy is conducted on the basis of counter-cyclical Keynesian concepts of regulation. In 1971 he came to power, the Conservatives proclaimed a "new approach" to monetary and credit regulation, based on the neo-conservative concepts. Were canceled outright credit constraints and measures to increase competition in the banking sector. This was accompanied by a sharp increase in the money supply and prices, and in 1973 the Bank of England returned to active use of direct methods previously applied to the credit crunch.
Since coming to power in 1979, the Conservative government of Margaret Thatcher, who proclaimed himself a "monetarist" monetary policy has become the main instrument of economic policy, the government abandoned the short-term policy "stop - go ahead. " Direction of monetary policy was determined by the deviation of monetary growth from the established limits. The main method of control of the Bank of England for monetary growth were its operations on purchase and sale of promissory notes, and, mostly commercial, not the Treasury, and the placement of commitments outside the banking system.
In the 1990s. the main instrument of monetary policy in the UK, as in other developed countries, is open market operations.