The Role of the Bank of England in Financial Market Regulation
The Bank of England plays a vital role in financial market regulation. It achieves financial market stability by undertaking the following roles:
Deciding the interest rates
In order to maintain financial stability, keeping the interest rate at minimum variation is vital. The Bank undertakes monetary analysis in order to achieve financial stability. It also buys and sales securities in the money markets to control interest ...view middle of the document...
High international debts can negatively impact on the financial market of England.
Implementation of domestic monetary policy
The bank of England actively regulates the supply of money in the financial market through the use of financial policies to ensure optimum money circulation in the economy. This is achieved by the Monetary Policy Committee that meets every month to assess the economic condition and take appropriate action. (Capie,1994).
Issue of coins and notes
The bank of England is responsible for issuing new coins and notes to the economy. The Bank monitors the economic condition to assess if it’s prudent to issue the notes and coins.
Regulating the UK banking system
The Bank of England in partnership with Financial Service Authority and the UK Treasury plays a role in regulation of the banking system.
Providing banking facilities
The bank is a provider of banking facilities to other banks. In addition, the bank is also a banker of the government. This requires that every bank must have an account with the Bank of England. The Bank also plays a role in the supervision of the financial companies and banks.
Capie, F. (1994). The future of central banking: the tercentenary symposium of the Bank of England. Cambridge University Press.