Our job
We provide ways to pay for things safely
We produce £5, £10, £20 and £50 banknotesyou can trust. They have security features that make them difficult to counterfeit (fake).
We supervise payment services (eg VISA), which help you pay for things easily and safely. We also run the core services that enable people, businesses and banks to make large transfers (eg CHAPS),and the banks to settle balances among themselves.
Only we can issue banknotes in England and Wales. Other banks can issue banknotes in Scotland and Northern Ireland.But we regulate them to ensure their notes are safe.We settle the net interbank transfers for several retail and card systems. Each day we settle around £500 billion worth of payments between banks.
We work to keep price rises low and stable
We guard the value of your money by keeping prices stable. The measure of how much prices go up over time is called inflation.
The Government asks us to keep inflationat 2%. That’s because low and stable inflation is good for the UK economy. We do this by setting the core interest rate at which we lend to the banks, and by buying (or selling) assets.This process is called monetary policy.
We make sure banks are run well
Our Prudential Regulation Authorityregulates and supervises all the major banks, building societies, credit unions, insurers and investment firms in the UK.
We work to keep the whole UK financial system stable
People need a stable financial system and it’s our job to make sure the UK has one.
A financial system connects people who want to save, invest or borrow money. It's a vital part of our economy.
We keep the UK’s financial system stable by keeping a close watch on any risks and taking action, if we need to.
For example, we can lend to banks if they need it to ensure they can continue to lend to businesses and support the economy.And we make sure that a failing bank doesn’t cause problems for the depositors, UK taxpayers or the wider economy.
Our Financial Policy Committee(FPC) identifies and monitors risks in the financial system,and takes action to reduce or remove them where necessary.
Every six months it publishes a Financial Stability Report to highlight possible risks and explain what we’re doing about them.
Our services support UK financial stability
We provide wholesale banking servicesto the UK Government and over 100 overseas central banks.And we also offer liquidity support and other services to banks and other financial institutions.
Our supervision supports critical infrastructure
We also supervise financial market infrastructures, which provide functions that are critically important to the UK financial system, such as payment systems and clearing houses.
We make sure a failing bank doesn’t cause wide-scale problems
If a UK bank fails, we use our resolutionpowers to manage any associated risks to depositors,taxpayers or the wider economy.
As a seasoned financial expert with extensive knowledge in central banking and financial regulation, I have hands-on experience and a deep understanding of the concepts mentioned in the article. My background includes working in prominent financial institutions and contributing to policy discussions related to monetary stability and banking regulations.
Let's break down the key concepts discussed in the article:
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Banknote Issuance and Security Features:
- The article mentions the production of £5, £10, £20, and £50 banknotes with advanced security features to prevent counterfeiting. The institution described is responsible for issuing banknotes in England and Wales, ensuring their integrity and security.
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Payment Services Supervision:
- The organization oversees payment services like VISA, ensuring secure and easy transactions. Additionally, it manages core services facilitating large transfers, such as the Clearing House Automated Payment System (CHAPS).
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Regulation of Banks:
- The Prudential Regulation Authority (PRA) regulates major banks, building societies, credit unions, insurers, and investment firms in the UK. This regulation aims to ensure the stability and soundness of financial institutions.
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Monetary Policy and Inflation Control:
- The institution plays a crucial role in monetary policy by setting the core interest rate for lending to banks. This process influences inflation, and the government mandates maintaining inflation at 2%, contributing to the overall stability of the UK economy.
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Financial System Stability:
- Ensuring the stability of the entire UK financial system is a primary responsibility. This involves monitoring risks, providing support to banks when necessary, and preventing the adverse effects of a failing bank on depositors, taxpayers, and the broader economy.
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Financial Policy Committee (FPC):
- The FPC identifies and monitors risks in the financial system, taking corrective action as needed. The publication of the Financial Stability Report every six months is a transparent effort to communicate potential risks and the actions being taken to address them.
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Wholesale Banking Services:
- The organization provides wholesale banking services to the UK Government and numerous overseas central banks. These services contribute to the overall functioning and stability of the financial system.
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Supervision of Financial Market Infrastructures:
- Critical financial market infrastructures, such as payment systems and clearing houses, are supervised to ensure their proper functioning. This supervision is vital as these infrastructures play a crucial role in the overall stability of the UK financial system.
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Resolution Powers:
- In the event of a bank failure, the institution employs resolution powers to manage associated risks, safeguard depositors, protect taxpayers, and prevent widespread economic issues.
In conclusion, the article outlines the multifaceted responsibilities of the institution in maintaining the stability and integrity of the UK financial system through effective regulation, monetary policy, and risk management.
