THE BANK OF ENGLAND AND OTHER FINANCIAL INSTITUTION
THE BANK OF ENGLAND
The Bank of England is the central bank of the UK. It was founded in 1694 and has many function:
- It is banker to the British government and to other banks.
- It exercise general authority and supervision over the banking and financial system in the UK.
- It control the issue of coins and notes in England and in Whales.
- It fixes exchange rates.
- It handles the UK’s debts.
- It protects the national gold and silver reserves.
- It fixes interest rates.
SAVINGS BANKS (= CASSE DI RISPARMIO)
As its name suggest, this type of bank encourages small savers to invest their money. The best know example is the National Savings Bank, run by the UK Government through post office. It offers the small investors two forms of account:
- ordinary account with a low interest rate, which are virtually tax-free;
- investment accounts with a much higher, taxable rate of interest.
MERCHANT BANKS ( =BANCHE D’AFFARI)
Merchant banks, such as Morgan Grenfell, are commercial organisation which not only carry out the main function of a commercial bank, but they also specialise in providing services to companies.
COMMERCIAL BANKS
Commercial banks, such a Lloyds, Barclays, National Westminser, and Midland, are also called joint-stock banks, and are owned by shareholders. They specialise in providing banking services to individuals
BUILDING SOCIETIES (= ISTITUTI DI CREDITO FINANZIARIO)
Originally, these institution specialised in loans ( = prestiti) to people who wished to buy houses, but they are increasingly competing directly with banks and many have become real banks. Example of building societies are Nationwide and Britannia. Generally, they provide loans to people who want to buy or improve their property. The people take out a mortgage ( = mutuo) from the building society so that their property acts as the security. If the mortgage payments are not met, the building society can sell the property to recover the debt.
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