The central bank of the United Kingdom is the Bank of England. History reveals that this bank served as the model bank for all the banks of the world. It was launched for the time in 1694 and was aimed to serve as a banker for the English Government. Later in 1734, it was shifted to the ThreadneedleThread needle Street in London.

On 1st March, 1946, this bank was nationalized, which got liberated in 1997. As it is the main bank of England, it forms the basis for the financial systems of the UK. Although the bank serves several purposes of the country, but the main responsibility of this bank is to maintain the economic stability in the country. As the economic conditions of a country are dependent on the ups and downs of the currency value so it is very important to formulate a proper and effective economic policy. Thus, a proper check should be ensured on the fluctuation of the currency.

The most important attribute of the Bank of England is to lend money to the other banks of the country in times of trouble. When any of the banks within the country is going through financial turmoil, the Bank of England lends loan in order to prevent the bank from going bankrupt. In this way, it plays its role of maintaining economic stability in the country.

The Bank of England has gold reserves as insurance for overcoming the obstacles emerging in the worlds economic market. The value of the gold reserves held by the Bank of England is four billion pounds. These reserves were held for more than 300 years but in 1999 the bank took a major step by auctioning the gold reserves. This step was taken in order to improve the standing of the bank in the world and thus increasing its currency holdings. The entire course of action led to the sale of 400 tonnes of gold.

The year 2007 turned out to be the worst period in the bankk’s history and the news staggered the whole world as the appearance of cracks in gold was reported. Thus, it was believed to make the god sale a bit difficult with decrease in its sale price as well. The bank had gold reserves in the form of gold bars and coins.

This entire situation made it nearly impossible to trade the gold in the world market. The economy of the country is entirely dependant on the actions of the Bank of England. At that time the demand for gold was on its rise that is why the price of gold was also high.

Due to the deterioration of gold, the price was greatly reduced. As a result, many investors suffered loss of money. The gold was sold at relatively lower rates because of the poor quality of gold.

The Bank of England lost more than 3.8 billion pounds, due to which it was made to face considerable criticism. However, the good reputation and effective portfolio helped the bank in achieving stability in its condition quite soon. However, the economy of the world has already been disturbed for the coming several years.

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