The Bank of England

The Bank of England is the central bank of the UK, as well as the centre of the UK’s financial system. Financial stability and monetary efficiency are the responsibilities of the Bank on behalf of the UK.

"The Bank's roles and functions have evolved and changed over its three-hundred year history. Since its foundation, it has been the Government's banker and, since the late 18th century, it has been banker to the banking system more generally - the bankers' bank. As well as providing banking services to its customers, the Bank of England manages the UK's foreign exchange and gold reserves and the Government's stock register."

(Source: Bank of England website http://www.bankofengland.co.uk)

Lending institutions calculate their charges upon the base interest rate set by the Bank’s Monetary Policy Committee. This committee sets the base rate while trying to maintain economic stability by keeping in mind the interest rate’s influence on overall inflation.

The Bank also works with the Treasury and the Financial Services Authority in dealing with economic crises. As a contingent measure, the Bank is also considered as the financial systems "lender of last resort".