Who owns the Bank of England?

[Luckypants]

Originally Posted by arc123

The BoE being one of the said institutions that buys the gilts.

Can you provide evidence for this? That is not my understanding of the system.

[arc123]

a quick search provides plenty of evidence. However, as far as I am aware this is not a new policy and has always occurred...
http://www.telegraph.co.uk/finance/f...t-economy.html

http://www.fxstreet.com/news/forex-n...4-df811099aaf5

http://www.investorschronicle.co.uk/...-buy-gilts.jsp

[Drew Carey]

I think you may have missed the point here a little. The BoE is buying BACK Gilts, IE what it previously sold, but for one sole reason......it acts as Guarantor for these Gilts, therefore the BoE is easing the economy by buying them back from Financial institutions.

It is not something that BoE does as a normal "Business as usual" function, but solely as a way to pump more cash into the economy, in effect it is a less drastic way of carrying out Quantitive easing - which moves us on to Mr Lincoln

What Mr Lincoln did was basically just print money as and when they saw fit. This is in effect a form of Quantitive easing. The major downside of this is that it is almost impossible to get exactly right.....and what it leads to is rocketing inflation as there is too much "cash" in the system. I don't have issues with the BoE stimulating the economy, but Govt control would lead to s similar path as to that of Lincoln; paying for a war by "Greenbacks" and then once over, rising inflation as all the people who recieved money for arms etc pump it back into the economy. This is why the BoE took so long to introduce Quantitive easing when some people were shouting that they took too long.

In all honesty, every banking system has its flaws and benefits.

[Luckypants]

Originally Posted by Drew Carey

I think you may have missed the point here a little. The BoE is buying BACK Gilts, IE what it previously sold, but for one sole reason......it acts as Guarantor for these Gilts, therefore the BoE is easing the economy by buying them back from Financial institutions.

Thanks Drew, I was about to point that out.

I know it's slightly off thread, but someone once told me the BOE was started by a Scotsman, so I wikiped.....thingy'd it.........

http://en.wikipedia.org/wiki/Bank_of_England#History

i own it !!!

If England (read Britain or whatever the correct term is, that is a point is bank of England actually correct) ever decides to use euros then all the old pound stirlings is likely to go back to the Bank of England. Normal banks send their money there, at least that is what happened in some other european countries when they changed over to the euro. I think after a long time you were not able to change your 'old' money in normal banks anymore but only with the bank of 'your country'.