The Bank of England is the central bank of the United Kingdom. It was founded in 1694, and it is located in London, England. It was established by an Act of Parliament (1694), and its original purpose was to raise money for King William III’s war against France.The Bank of England has a monopoly over issuing banknotes in England and Wales, although Scottish and Northern Irish banks retain the right to issue their own banknotes in their respective countries.The Bank of England is the only UK central bank that is permitted to issue banknotes. It is also a member of the European System of Central Banks (ESCB). The bank was nationalized in 1946 and its functions were taken over by the government. In 1997, the bank's independence was placed in doubt when it was instructed to provide an emergency £5.5 billion loan to bail out the collapsed Bank of Credit and Commerce International (BCCI). However this dispute was resolved, and the Bank is now entirely privately owned, with shareholders receiving an annual dividend of 6.5 percent. The British Government does not have a majority stake, but does hold ordinary shares.The Bank of England has been granted many rights and powers: the ability to set interest rates, the power to issue credit and the responsibility for printing the nation's money. It has been allowed to issue banknotes on behalf of the Treasury since 1694, and has a monopoly on the issue of banknotes in England and Wales. The Bank has a degree of independence from government similar to that enjoyed by central banks in most other developed nations.
