lucky wrote:Stephen Morgan wrote:lucky wrote:The front of all paper notes in the Uk bear the legend "I promise to pay the bearer on demand the sum of Five pounds", ten pounds etc My question is who is making the promise (the bank of England?) and what do i get when I exchange my Five pound note? In other words what "is" five pounds
Five pound coins, shiny round bits of real money. Or possibly one of those and two two-pound coins. The pound coins are simply issued by the government, in whatever numbers they see fit, totally unbacked by debt or by gold or by anything else other than the faith of the public.
The promise is that of the Governor of the Bank of England, on the behalf of the Bank. The bank is wholly owned by the tax-payer at the present time, although controlled by the Monetary Policy Committee, a supposedly apolitical body who are meant to ensure a stable rate of inflation through setting interest rates.
I thought the bankofengland was a private company with its own board of directors?
It was formed as such in the seventeenth century, but was nationalised by the Labour government of 1945-1951. It was, in fact, the first thing nationalised, before they even nationalised the natural monopolies or created the National Health Service, or anything. It was then directly controlled by the Chancellor of the Exchequer until 1997 when Blair's lot put it under the control of an impartial, apolitical group, allegedly, to be run outside the nastiness of democratic politics. Still owned by the government, though.
