The British central bank, popularly known as the ‘Old Lady of Threadneedle Street’, where its London office stands. It was founded in 1694 as an undertaking by 1268 shareholders to lend £1,200,000 to the government of William III to finance his wars against France. In return it received 8% interest and the right to issue notes against the security of the loan. These privileges were confirmed in 1708 when its capital was doubled, and it was given a monopoly of joint-stock banking which lasted until 1826, thus preventing rival banks from having large numbers of shareholders.

The bank is controlled by the Governor of the Bank of England and a court of 16 directors, appointed by the Crown. Its responsibilities include acting as banker to the government and as its agent in the issue of treasury bills; functioning as lender of last resort to the clearing banks, enabling it to control the amount of money in circulation; issuing the country’s stock of money as supplied by the Royal Mint; acting as registrar for government stocks; managing, on behalf of the Treasury, the money market and exchange equalization account; and determining the interest-rate structure of the economy.