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Is the Bank of England or the Federal Reserve the government?

Who prints the money? Government borrows money from who?

Could somebody please explaing to me the relationship between them?
Does anyboy understand this well enough to explain this in very simplified terms? Thank you.

2007-01-22 23:12:17 · 3 answers · asked by Anonymous in Social Science Economics

3 answers

The Federal Reserve is the AMERICAN equivalent of the Bank of England.

In Britain, the Bank of England is the organisation that prints the money. It is also overseer of the whole monetary system and keeps tabs on all the money we use i.e. the bank accounts and company borrowing etc as well as notes and coins. It needs to do this because the supply of money is the main influence on the rate of inflation.

The Treasury is a government department. It is responsible for all the money the government gets in in taxes (through the Inland Revenue and the Customs and Excise [mostly VAT]) and fees for services we pay them for. It also is in charge of all government spending.

The government, i.e. the Treasury, borrows money from (a) you and me and (b) foreigners. It borrows mostly through the stock market, the part known as "gilts" (= government bonds, debt securities it issues for anything from one year to several decades 'maturity'). 'Maturity' is the date they repay the face value of the debt, like with a mortgage the last day you pay it off. When I say "you and me", i don't mean literally for the most part, we buy insurance and pay into pension plans and it's our pension funds and insurance companies who are the main buyers of gilts.

There is no direct relationship between the Treasury and the Bank of England. But there is an economic relationship because government borrowing affects the money supply which the Bank of England needs to restrain to keep inflation down.

Hope this helps you :-) If its not simple enough for you, feel free to email me with added questions.

2007-01-24 10:53:57 · answer #1 · answered by MBK 7 · 0 0

Wait a minute right here. it incredibly is the Federal Reserve (a private business business enterprise of prosperous bankers) that controls the bypass of money. we could be fortunate if we nonetheless had Treasury Notes subsidized via the more desirable. we stay on debt good now with chronic wars being financed via the Fed, the printing presses are working day and nighttime and we are going deeper in debt! We could desire to return to Treasury notes issued via the government and not some deepest business business enterprise!

2016-12-16 15:23:26 · answer #2 · answered by Anonymous · 0 0

Like any other bank:

You strive. They thrive.

2007-01-22 23:15:49 · answer #3 · answered by ? 5 · 0 0

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