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Concussion to the Bank of England


In the world you some places let you pick up the golden rod and potežkate. One of them with a & # 39 is the Bank of England (BoE) in the historic center of London, Bank Museum.

When we at the Bank of England donated a gold bullion standard size for storage of gold reserves (which weighs 400 ounces, which amounts to 12.4 kg), will be richer around 466000 euros, and by mid-March of this year was the market price of such quantity of pure gold,

Of course, the National Bank and the Bank of England, its gold reserves jealously guarded. Gold bar, which I had in my hands was a showcase of bullet-proof glass; This can be achieved only through a small hole is made so that the rods can not be removed from the display.

The Bank of England has made no secret of how much gold in his safe. Recently, the United Kingdom otherwise reducing their foreign exchange reserves, the Bank of England place with the second largest amount of gold reserves in the world after the US central bank Fed. In his inscription museum visitor is worth on a set, in which more than 400,000 gold bullion. The Bank of England in mid-February 2019 in the nutritional 163,796,000 ounces of fine gold with a market value of more than € 190 billion. It is not only the British gold reserves – the Bank of England's gold reserves and 30 stores in other countries. According to some estimates, approximately three percent of all the gold that has ever been excavated in the world throughout the history of mankind, is stored in a vault in London.

"Around 400,000 gold bullion stored in vaults under the city, where just standing," he said on one of the panels at the Museum of the Bank of England. Photo Milan Ilic

Gold bullion from the Bank of England vault in all the 325 years since its establishment has not yet been prey of robbers. The greatest shock in this area bankers have extensive experience in 1836. That same year, the bank's executives received anonymous letters with similar content, in which the author has to convince them that they can personally meet with them in the underground vaults of the Bank of England, when they want.

To counterfeit Bank of England banknotes from 1697 revealed no death penalty in the United Kingdom in the past to the 1832nd

Leaders realized that maybe, just no joke, so they told him an hour meeting in the store so that requested it and, of course, at the appointed time, there is also a & # 39 appeared. It was not long before they heard sounds from beneath the vault. Plank on the floor, and they have grown out of them climbed onto the man. It was London's installer, which in its work on the streets found that the old pipe ends directly under the bank vault unreinforced soil. The installer was an honest man and was stunned bankers said that from the store did not take single gold bars. When they checked, they were rewarded with the £ 800; in today's money it will amount to about 80 000 pounds, or 91,000 euros.

From this example we can see that the money (for example, unlike gold) has been losing value, so it does not make sense to store large amounts of cash "socks" and generally without any interest. Today you need to, for example, 23 pounds, to buy the same amount of goods and services that you have six years ago, in 1959 (when it was founded Work), you can buy a pound. Responsible in the Bank of England in recent years, emphasizing that their aim is to keep annual inflation at around two per cent. What they will not grow to the full, but not very far from the goal: in 2017 the inflation rate of the pound sterling was 3.58 percent in 2018 to 2.48 per cent.

Despite the great political tension in anticipation of the release of the United Kingdom of Great Britain and Northern Ireland from the European Union, the pound sterling (GBP international abbreviation: GBP) is relatively well against the euro. Since the end of 2017 so far, its rate between 1,10 and US $ 1,15 per pound. One pound, so still worth a little more than one euro.

On the & # 39; the appearance of the roof of the Bank of England in the British pound. Photo Milan Ilic

Banks in Britain in the modern sense is a tradition that dates back to the beginning of the 17th century, when the local jewelers have started to offer the first services of credit and money saving, but later the issue still paper-based financial certificates, ie paper money. More wealthy people to the jeweler (who had a room in which it is difficult to thieves) are often associated with the preservation of their gold and other valuables. On this basis, the jewelers, you can borrow money and pay interest on them. Thus, jewelers offer services that were similar to today's current account. Whoever Goldsmith on what mood the jeweler to get it confirmed. It was not that these certificates began to be changed owners and became the forerunner of today's paper money. «Zlatarevo certificate" was the forerunner of the modern bill.

Despite the great political tension in anticipation of the release of the United Kingdom of Great Britain and Northern Ireland from the European Union, the pound sterling hold relatively well against the euro. One pound, so still worth a little more than one euro.

Sir William Petty, a political economist, said in an article in 1682, wrote: "Is there a cure for this, if we have enough money? We need to create a bank ". In the same year he founded the Bank of the City of London (City of London Bank) A year later, the National Bank of Credit (The National Bank of Credit) But how quickly failed. Conditions for the establishment of national banks has improved in 1688, when political turmoil came to the throne, William and Mary, and if the country has changed the fundamental relationship between the monarch and Parliament. At the same time, the war with France, which began in 1688, has weakened the royal treasury. In 1694 the kings of the annual income of two million pounds sterling, only development costs were EUR 2.5 million pounds. The government was forced to unusual measures to fill the budget, for example, the public lottery with high honors.

In such circumstances, was established in 1694, the Bank of England. The first few decades of work in rented premises in 1734 while he built a building in London street Threadneedle StreetWhere today. Probably, it was the first building in the world, which was built exclusively as a bank. At the same time, they repeatedly modernized in terms of architectural aesthetics are not always very successful. Now it looks like a fortress, which is surrounded on all sides by a wall.

£ 50 note with a & # 39 is the largest note that the press in recent years. In this kind of printing an image with 2011: the first page of an image of Queen Elizabeth II on the reverse side of the picture, Matthew Bolton and James Watt ;. Bolton industrialist and the inventor of the steam engine, Watt was a business partner and had a great influence on the mechanization of production and the industry in general. Photo Milan Ilic

The first meeting of directors of the Bank of England decided to make the minting of a recognized three ways: (1) to issue the documents / books with the customer-depositor certificate (2) third parties paid to depositors and the procedure (3) to give the so-called works available notesCertificate, which is committed to the depositor or the holder of the certificate in cash (minted money) paid the full amount or part of the amount, if at the request of the depositor or his representative. Very quickly, by the end of the 17th century, it became clear that the third method (note issue) has become the most popular, so this method the core business and the largest source of income of the Bank of England.

At the same time, the bank has a monopoly on the issue of banknotes. At the same time, were set up and some competitive banks, such as the National Land Bank (National Land Bank). It was founded in 1696 and issued notes under the registration of coinage, but also on the basis of the client's rights of land ownership. This form of business (money in exchange for a mortgage on the land) has been completely unsuccessful. National land bank instead of the required 2.5 million pounds was able to get only 10 thousand pounds.

Act 1708 banned six or more persons on the & # 39; united in the banking business, which was the Bank of England (as well as a private company with limited liability) are protected against more serious & # 39; oznyh competitors. Laws jeweler and small provincial merchant bankers do not prohibit the participation in financial transactions for major transactions, monopolies of the Bank of England.

The famous composer, Georg Friedrich Handel, who has since 1712 lived and worked in London, was one of the most famous people who have been clients of Bank of England in the early period. In addition, the famous painter, William Turner, who was also a talented financially. Bank customers are also well-known writer Charles Dickens, the naturalist Charles Darwin and his relatives from the family Wedgwood (who is known for the production of porcelain) and many others.

One of the objectives of the Bank of England to maintain the annual inflation rate at around two percent. Photo Milan Ilic

The Bank of England has kept a relatively good market all the turmoil and war in which England took part in the 18 th century – despite the fact that the public debt has increased from 12 million pounds in 1700 to 850 million pounds in 1815, when Napoleon was finally defeated at Waterloo, in this period, the greater the financial crisis in the UK in the turbulent years, shortly after the French revolution in 1789. revolutionary France, which giljotinirala their king in 1793, was in the same year in the war with England. In February 1797 a small French military unit, even landing on the English coast, together with its Irish and American allies. They quickly defeated and captured, but after Britain reigned fear of invasion. People have lost confidence in the Bank of England and rushed to change their notes for gold. Thus, the Bank's reserves in the short term, with 16 million pounds reduced to about two million pounds. Prem & # 39; -Minister William Pitt the Younger in the same year (1797) decreed that the Bank of England to stop paying gold coins. This "limitation period" lasted until 1821. This is not it interesting that in 1798 the United Kingdom introduced a tax on income as a temporary measure during the war. This tax, which is currently distributed throughout the world, in the United Kingdom abolished in 1816, and then again in 1842. Today UK income tax is progressive: up to 11,850 pounds of annual income is not paid, then there are three tax "ladder" with rates of 20, 40 and 45 percent. Last, the highest rate of income tax is paid an income of over £ 150,000 a year.

Banking in England in the modern sense is a tradition that dates back to the early 17th century.

People in the UK, among them the 17th and 18th centuries, many illiterate, were skilled chasing authentication, much worse, they were able to distinguish the genuine from the counterfeit banknotes. This is an opportunity to see a lot of fakes, despite the draconian penalties for such illicit enrichment. To counterfeit Bank of England banknotes from 1697 are spoken for even the death penalty. Only in this limitation period in the years 1797-1821 as a result of counterfeit 600 awarded, of which 300 were hanged. Death penalty for counterfeiting money is not in the UK in force until the year 1832nd

The Bank of England was also cruel to the "bad boy of its kind." Among the growing number of bank employees were n & # 39; Janica players and those who just steal the pot. Because of such a crime: in 1767 he performed the first employee of the Bank of England. This "honor" belonged to William Guestu, nicknamed "the barber gold"; Guest was cutting pieces of gold, gold rim, held by the Bank of England. Thus, he reduced the Bank's reserves and increase their property, as long as you do not get caught. He was sentenced to death, but not because of the embezzlement, but because of "state issue", as defined in this time.

In the 19th century, he joined the Bank of England as part of a broader and stronger throughout the UK financial system. During this time he founded the London Stock Exchange, and global functioning Lloyds already in the 18th century, has become synonymous with the giant reliable insurance company. After the Napoleonic Wars in 1816, the Bank of England, which is from the 18th century onwards, exchanging silver and gold "gold standard" established by law: the pound sterling was defined as a fixed amount of gold and silver, not more. Paper money could ever be exchanged for gold. The gold standard also introduced the rest of the major economic powers of the world, including France, Germany, Japan, Russia and the United States. As a result, the system of fixed exchange rates was established. The entire system was not working well at the international level before the First World War.

Golden rod, heavy 12.4 kg reinforced glass at the Museum of the Bank of England, which you can touch and lift it slightly off the ground. Photo Milan Ilic

The First World War was a shock to the British economy and public finances. Although was not adopted any law on the banknotes no longer be exchanged for gold, as well as during the war against revolutionary and Napoleonic France gold shortly after the First World War have disappeared from circulation. The cost of this war has been enormous. The national debt has increased by more than seven billion pounds. As well as otherwise, the main task of the Bank of England the British government debt management. Two billion pounds were collected from military duty, half of which Bonds falls at the beginning of 1917, which was five percent per annum. Number of employees of the bank has grown to more than 4,000 of them have also had a lot of women.
In the interwar period, the Bank of England finally transformed into a modern central bank. He focused on its primary role – in the business of public reporting.

During the Second World War, in 1939, in the United Kingdom, as well as the Bank of England joined the much less surprised than the First World War. Many of the emergency measures in the war against the carefully planned. For example, a five percent interest on war loans, which are partially exposed to the First World War, they turned out to be an excessive burden on public finances. Interest on loans during the Second World War amounted to less than three percent. Shortly after World War II, the Bank of England has ceased to be a private company: March 1, 1946, it was nationalized. Since then it has undergone several periods of stress: in 1967, the pound was devalued by 14 per cent; 1973-1974 was a big oil crisis (inflation of the pound sterling was 16 percent in 1974 to 1975 from 24.2 percent in the double remained until 1981); One thousand nine hundred ninety-two was the British pound was forced to leave the exchange rate mechanism (Exchange rate mechanism) The European Union, which came in 1990, because he was the target of global financial speculators; The global financial crisis began in 2007, very soon to perform well brexit.

Pound sterling is the oldest currency in the world, which is still used today. There is the Anglo-Saxon era, when it consisted of 240 silver pence (W) Sterling Silver. The name "pound" comes from the Latin name scales Pond ( "Weight lb"). "Sterling" comes from the old Germanic word Sr. ( "Strong", "clean", "excellent"). Sterling silver was originally meant purity, the quality of the metal in the former silver money. One pound of paper with the & # 39; was in 1797, at the time described the lack of gold in circulation during the war with revolutionary France, Britain and its allies. In 1928, one pound re-start printing since 1983, but they replace coinage. Pound on paper today published the names of 5, 10, 20 and 50 pounds. From the first minting of about £ 790, but by 1971 he had such currency 240 pence pieces (penny). In 1971 they switched to the decimal system, and since then has one pound of 100 pence. Banknote British pound today is not printed on paper but also on a more durable polymeric material. Total circulating nearly three billion of notes of that currency in the total of & # 39; the amount of 58 billion pounds. Pound has long been a third world currency reserve (which is about four percent of the world's foreign exchange reserves) against the US dollar and the euro currency, and the fourth in the total of & # 39; the volume of transactions in the foreign exchange market (US dollar, euro and Japanese yen).

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