The 1946 "nationalization" of BOE

The 1946 "nationalization" of the Bank of England

1946: The Bank of England is nationalised which means that the state acquired all the shares in the Bank of England, which now belong to the Treasury and are held in trust by the Treasury Solicitor.

However, as the government has no money to pay for the shares, they give the current secret shareholders of the Bank of England, government stocks instead of money for their shares. This means that although the state now receives the operating profits of the bank, this gain is largely offset by the fact that the government now has to pay interest on the new stocks it has issued to pay for the shares.

So, although the Bank of England is now state-owned, the fact is that the British money supply is still almost entirely in private hands, with 97% of it being in the form of interest bearing loans of one sort or another, created by private commercial banks.
As a result of this, the bank is largely controlled and run by those from the world of commercial banking and conventional economics. The members of the Court of Directors, who set policy and oversee its functions, are drawn almost entirely from the world of banks, insurance, economists and big business.

Although the Bank of England is called a central bank it is now essentially a regulatory body that supports and oversees the existing system. It is sometimes referred to as, “the lender of last resort,” in so far as one of its functions as the bankers’ bank is to support any bank or financial institution that gets into difficulties and suffers a run on its liquid assets. Interestingly, in these circumstances, it is not obliged to disclose details of any such measures, the reason being so as to avoid a crisis in confidence.

Search SEIGNIORAGE in the Hansard...