Business & Finance

How does the bank of England work?

Where does it get its money from? surely not a great big pot of gold in the dungeons??

Laza10 Sun 05/10/08 22:11

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joggerjayne
Sun 05/10/08
22:16

There's no pot of gold there, because Gordon Brown flogged off most of our gold reserves when he was Chancellor.

Ooh, look how nicely my Budget balances ...

... sorry about plundering all the gold.

But actually, it is just a very big bank, like any other. Some important people have their accounts there (eg the Government), but individuals can have an account there too (by invitation of the Governor of the B of E).

terambulan
Sun 05/10/08
22:16

That's exactly how it worked till Tony Blair flogged the gold. Maybe there are platinum/diamonds instead?

Laza10
Sun 05/10/08
22:17

Question Author

Thank you for this! been wondering about it for ages!

joggerjayne
Sun 05/10/08
22:29

Hi terambulan.

So we're both agreed ... Blair/Brown flogged off all the gold.

And with all the £bn's that they realised, we all now have loads of money.

Yes?

Erm ...

factor30
Mon 06/10/08
06:58

If you mean Banks generally, banks actally hold about one eight of the money banked with them. The whole banking process works on the basis that everyone won't demand their money at the same time.

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