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INTRODUCTION
WHY ALL ROADS GO TO LONDON?
HISTORY OF LONDON
THE GROWTH OF LONDON
MODERN LONDON
SIGHTSEEING
Trafalgar square
St. Paul's Cathedral
The tower of London
Westminster Abbey
Big Ben
The Bank of England
THE CITY OF LONDON
AS A FINANCIAL CENTER
LONDON'S VILLAGES
THE ROUT OF VISITING
THE MAIN
CONCLUSION
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The Bank of
England was established in 1684 by Act of Parliament and Royal Charter
as a corporate body. Its entire capital stock was acquired by the
Government under the Bank of England Act in 1946. It is the heart of the
City of London and Britain's central bank. The Bank's main functions are
to execute monetary policy, to act as banker to the Government, to issue
banknote and to provide central Banking facilities for the banking
system that is the Bank is responsible for the financial system as a
whole; it is "lender of last resort". The Bank's main objective is to
support the Government in achieving low inflation. Unlike some other
central banks the Bank can not act independently of the Government.
Decisions on changes in the interest rates are taken by the Chancellor
of Exchequer. The Bank's role is to advise the Chancellor and to carry
out his decisions. The 1999 (November) interest rate was 5.5%. As banker
to the Government the Bank of England is responsible for managing the
National Debt. It has the sole right in England and Wales to issue
banknote. The note issue is no longer backed by gold but the Government
and other securities. The Scottish and Northern Ireland Banks have
limited rights to issue notes and those must be fully covered by
holdings of the Bank of England notes. Coins can be provided by the
Royal Mint. The Bank of England can influence money market conditions
through discount houses. If on any day there is a shortage of cash in
Banking system, the bank relieves the shortage either by buying bills
from the discount houses or lending directly to them. The Bank of
England is responsible for supervision of the main wholesale markets in
London for money, foreign exchange or gold bullion.
On behalf of the Treasury the Bank manages the Exchange Equalization
Account (EEA). Using the resources of EEA the Bank may intervene in the
foreign exchange markets to check undue fluctuations in the exchange
rate of sterling.
Discount Houses. The Discount Houses are unique to the City of London
(and to Britain as a country). They occupy the central position in the
British monetary system. They act as intermediaries between the Bank of
England and the rest of the banking sector promoting an orderly flow of
funds between the Government and the banks. In return for acting as
intermediaries the discount houses have privileged daily access to the
Bank of England as "lender of last resort". Banks.
Banks in Britain developed from the London gold miths of the 17th
century. By the 1920s and the 1930s there were five large clearing banks
with a network across the country. In February 1996 there were 539
institutions authorized under the Banking. Act of 1987. In British
banking retail banks should be described as dominant.
Retail banks primarily serve personal customers and small to
medium-sized businesses. They operate through more than 11.350 branches
offering cash deposits withdraw facilities and systems for transferring
funds. They provide current accounts, deposit accounts various types of
loan arrangements and a growing range of financial services. The main
banks in England and Wales are Barklays, Lloyds, Midland, National
Westminter and the TSB group. The major Scottish banks are the Bank of
Scotland, Clydesdale and Royal Bank of Scotland.
With a relaxation of restrictions on competition among financial
institutions major banks have diversified the services they provide.
They have lent more money for house purchases, have more interests in
leasing and factoring companies, merchant banks, securities dealers,
insurance and trust companies. They provide low facilities to industrial
companies ands now support a loan guarantee scheme under which 70% of
the value of loans to small companies is guaranteed by the Government.
Plastic card technology has revolutionized cash transfer and payments
systems. There are around ninety two million plastic cards in
circulation in Britain. There are different types of cards but they
often combine functions. Cards can be used overseas too to obtain cash
from bank ATM ( Automated Teller Machines). Cash machine cards have
greatly improved customers' access to cash. All retail banks and
building societies participate in nation wide networks of ATMs. About
two thirds of cash now is obtained through Britain's twenty one thousand
ATMs. .A lot of them are located different places at supermarkets, for
instance. Many banks offer electronic payment of cheques, telephone
banking, under which customers use a telephone to obtain account
information, make transfers or pay bills. Other innovations include
computer-based banking (through home computer) services over Internet
and video links. Merchant banks. The traditional role of merchant banks
was to accept bills of exchange, to provide funds for trade and also to
raise capital to British companies through the issue of bonds and other
securities. These activities continue, but the role of Britain's
merchant banks has diversified enormously in recent years. Although they
are called "banks" they are more involved in providing a range of
professional services, such as corporate finance and investment
management, than in lending money. |