A Bank of England
The Bank of England was founded in 1694 to lend money to the Government. It was given a monopoly of joint stock banking and became the Government’s bank. Then it wasn’t a nationalized institution, only a private bank which had a lot of influence partly because of its close relationship with the Treasury. The Bank of England was nationalized in 1946 and ever since it’s been the central bank of the United Kingdom. The functions of the Bank of England are:
1. It is the Banker of the Government (holds the central account of the Government, manages the Government’s stocks, controls the monetary policy of the country. arranges short term borrowings for the Government)
2. It is the Banker’s Bank (all other banks turn to it for guidance).
3. It is the issuer of bank notes.
A Federal Reserve System (FED)
Most countries have a central or national bank which plays a pivotal role in the formulation of the national economic policy, in the implementation of its international monetary transactions, as well as in the handling of the national currency. Such well-known central banks are the Federal Reserve System of the USA and the Bank of England in Great Britain.
Most American banks belong to the Federal Reserve System, which regulates banking in America. The nation is divided into 12 FR Districts and there is one FRD bank in each district.
Functions of the Federal Reserve System
By 1913, America’s economic growth both at home and abroad required a more flexible, yet better controlled and safer banking system. The Federal Reserve Act of 1913 established the Federal Reserve System as the central banking authority of the United States.
Under the Federal Reserve Act of 1913 and amendments over the years, the Federal Reserve System:
• Conducts America’s monetary policy.
• Supervises and regulates banks and protects consumers’ credit rights.
• Maintains the stability of America’s financial system
• Provides financial services to the U.S. Government, the public, financial institutions, and foreign financial institutions.
The Federal Reserve makes loans to commercial banks and is authorized to issue the Federal Reserve notes that make up America’s entire supply of paper money.
A kétszintű bankrendszer Magyarországon
On 1. January 1987 comprehensive changes were introduced in Hungary’s banking system. The central and commercial banking functions were separated. A new, so-called two-tier system was established in order to make the allocation of financial resources more efficient. The new banking environment, in contrast to the old system which met the needs of a strictly planned and centralized economy, is based on the challenge of a macro-planned, market-oriented and more decentralized economy. The new system allows the National Bank of Hungary to focus on macroeconomic policy issues, leaving the microeconomic aspects of credit allocation to the commercial banks.