ECB policy path is more open than Bank of England

Headline EU/UK: ECB policy path more open than Bank of England

The UK: Financial Globalization and Formalization of Banking Supervision

Among the developed economies, the UK was the latest to formalize banking supervision as we define it in this book. The process began in the mid-1970s following the fringe bank crisis and the simultaneous beginning of international cooperation on banking regulation matters in the Basel Committee on Banking Supervision. The crisis led to the reforms of both the Banking Act and the Bank of England Act in 1979—the Bank of England was assigned its first formal duties and responsibilities for banking supervision, and the commercial banks had to meet bank-specific requirements instead of the general corporate law. However, given the reluctance of the Bank of England to conduct banking supervisory activities as well as the Bank’s behavior to stick with the conventional informal “governor's eyebrow,” we deem the formalization process ongoing until the reforms of 1987. The Banking Act 1987 clarified the Bank of England's responsibilities and mandate regarding banking supervision, and the Board of Banking Supervision was established as a permanent formal organization to monitor and council the Bank of England on supervisory matters. The UK is an interesting case where the banking supervision remained informal until quite recently—compared to other countries. The formalization process can be explained by the crisis and the international push for harmonized banking regulation.

Introduction to Part II

This Introduction indicates the aim of the two chapters that follow: to illustrate how parliamentary debate provided political economy with its topics of discussion and forms of argument. The particular case studies are the Bullion Controversy and the Corn Laws debate. The first controversy concerned the role of the Bank of England in raising prices through an excessive note issue, and this question came to be examined by writers such as Malthus and Ricardo at an abstract level. But this style of argument was rejected as inappropriate for guiding the deliberations of Parliament in 1810–1811. In relation to the second case, the Corn Laws, c. 1813–1815, the question of whether or not the trade in corn should be free was treated in Parliament as a question requiring casuistical adjudication, a style of argument that Malthus and Ricardo were evidently obliged to adopt, along with other participants. Both topics have traditionally been studied as key moments in the development of economic theory, yet the account developed here suggests that we have typically misread the texts by placing them in unhistorical contexts.

The Vocabulary of Theory and Practice in the Bullion Controversy, 1797–1811

This chapter uses the Bullion Controversy to test the hypothesis articulated at the close of the previous chapter—that Malthus and Ricardo did not use the notions of method and model in their work but rather tended to think in terms of theory and practice. The debate over the Bank of England does indeed represent confirming evidence for Malthus’s and Ricardo’s use of the vocabulary of theory and practice. Moreover, the episode shows that Ricardo was porous to his argumentative context, deploying Ancient Constitution style rhetoric to legitimize his attacks on an august Whig institution. For his part, Malthus also used this vocabulary while registering some doubts over Ricardo’s intellectual performance as a theorist, a title to which Malthus also laid claim.

Combatting internet time shifters

Combatting internet time shifters Arguably, the internet’s biggest security hole is the Border Gateway Protocol (BGP), which establishes routes between the organisational networks that make up the internet (e.g. Google, Facebook, Bank of England, Deutsche Telekom, AT&T). The insecurity of the internet’s routing system is constantly exploited to steal, monitor, and tamper with data traffic. Yet, despite many years of Herculean efforts, internet routing security remains a distant dream. The goal of the SIREN project is to propose and investigate novel paradigms for closing this security hole.

The 1783 proposal for a readymade note at the Bank of England

This article analyses the 1783 proposal to issue readymade notes to the Bank of England's private banking customers. Prior to 1783, I argue that there were two broad categories under which the Bank issued its notes into circulation: (1) notes which were issued to government in relation to the Bank's role as facilitator of the fiscal revenues of state, and (2) notes which were issued to its private banking customers. The readymade note was a form of paper money which the Bank had previously been issuing only to government and, unlike the notes which the Bank originally issued to its private banking customers, was made out in advance of its being issued into circulation. I argue that the transformation suggested in the 1783 proposal was made possible by the unique relationship which the Bank had always had with the government, and I will make three observations based on identifying how this transformation took place.

Are Central Bank Digital Currencies the Future of Cash?

William Lovell, Head of Future Technologies at the Bank of England, explores how central bank digital currencies might change money, the problems of a cashless society and how he’s keeping bar staff guessing.