Bank of England Is Chartered (Chronology of European History)
Article abstract: The Bank of England is chartered, creating a central bank that can provide financial support to the British government and consolidate control of its financial systems.
Summary of Event
One of the oldest of the European national banks, the Bank of England was chartered in 1694, establishing a trend followed by most major Western nations over the subsequent three hundred years. Sweden had created its own “central” bank, the Riksbank, almost fifty years before the Bank of England, but neither it nor the other European government-originated banks truly had central banking powers. Technically, a central bank not only acts as a lender of last resort to the private sector and furnishes loans to the government but also regulates the financial system through its use of reserves. No European bank possessed that capability before well into the 1800’s.
The Bank of England originated with the seizure of merchants’ funds by King Charles I, after the funds had been deposited in the Tower of London. The merchants had intended to use the money to pay overseas debts, but Charles needed it to cover expenses arising from his Scottish wars. Although the king gave back the money—in return for a loan of forty thousand pounds—the outraged merchants knew they no longer could leave deposits at the Tower, choosing instead to keep the funds in their stores under the authority of their employees. After the...
(The entire section is 2154 words.)
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