StudentShare solutions
Triangle menu

The Controversial Approach of the Bank of England - Essay Example

Nobody downloaded yet
This report presents a critical overview of the approaches adopted by the Bank for the sake of economic recovery in the country. Considering the devastating effects of the recent financial crisis, the Bank of England considered it essential to improve liquidity position through initiating “liquidity support operations” (Joyce). The intention behind these operations was to facilitate interbank market with more readily available funds. The Bank, in this regard, outstretched its normal operations by way of enabling commercial banks to obtain funds more easily. In addition to these initiatives, the Bank also considered other measures, such as, the introduction of “Special Liquidity Scheme” which enabled banks to exchange their assets with T-bills, which otherwise could not be materialized on short notice. This facility later was referred to as the “Discount Window Facility” (Joyce). However, these policies were brought into action after the Bank loosened the monetary policy by way of lowering down interest rates significantly. Although, the purchase of public and private assets was termed as a policy measure by the Bank, but in fact, these actions were forced to be taken by the Bank since the earlier loosening of monetary policy came out to be ineffective in achieving the 2 percent rate of inflation (Joyce, Tong and Woods). ...
The growth trends in the UK economy from the first quarter have all been recorded in negative, i.e. – 0.1 percent, - 1.2 percent, 0 percent, - 1.4 percent, - 0.5 percent and – 1.3 percent. On the other hand, like other sectors of economy, the output of the construction sector of the UK declined significantly by 5.2 percent during the second quarter of the current fiscal year (Richards). According to the critics, the public and private assets purchasing policy of the bank proved to be detrimental itself for the economy as the Bank of England swapped financial assets with the commercial banks so as to increase the backup reserves of the banks, which could be used to further increase their lending operations in the market. But on the other side, the loosening of monetary policy and decline in interest rates meant that the deposits made by public in the bank were valueless. Moreover, the lowering down of interest rates also decreased the targets for businesses in the UK which were set in relation to the returns expected on equity and capital of the firms. At the same time, it was also expected that the increased inflation rates would turn into increased demand and thus such increase in demand would lead to economic revival in the UK and would also improve lending operations in the UK financial market (Auerback). However, things went opposite to what was expected; as reported in the recent publication of the British Bankers Association, the mortgage lending for the month of June came out to be ? 7.2 billion, which if compared with the latest semi-annual averages was less than by ? 0.8 billion. Further, forecasting of mortgage lending shows that this declining trend ...Show more
Cite this document
  • APA
  • MLA
(“The Controversial Approach of the Bank of England Essay”, n.d.)
Retrieved from
(The Controversial Approach of the Bank of England Essay)
“The Controversial Approach of the Bank of England Essay”, n.d.
  • Cited: 0 times


[Instructor Name] The Controversial Approach of the Bank of England In the recent financial crisis, the United Kingdom stood among the most affected countries in Europe. Owing to the severity of the crisis, the central bank, i.e…
The Controversial Approach of the Bank of England
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The Controversial Approach of the Bank of England"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Evaluation of the 2011 Policy of the Bank of England
According to the research findings the Bank of England’s Monetary Policy Committee decision to maintain the interest rate at an extremely low figure of 0.5% is unjustified given that the primary function of interest rates, based on the Bank of England’s inflation-targeting policy framework for interest rates, is to meet inflation rather than output targets.
14 pages (3500 words) Essay
Monetary Policy of the Bank of England
This essay focuses on the provision of the comprehensive analysis of the monetary situation in the UK economy and determination of the desired monetary policy changes on the part of the Bank of England. It is shown in the essay, that BoE need to gradually increase its interest rates while at the same time allowing lowering of expected inflation.
7 pages (1750 words) Essay
The Arrest Of Vessels Has Long Proven To Be A Controversial Exercise In The Law Of England And Wales
Introduction a. Synopsis b. Aims and objectives c. Scope of work 2. Literature review a. Arrest of vessels b. Laws in UK, Canada and US c. Procedures d. Conflicts 3. Approach and Methods a. Case studies 4. Analysis and reflective learning (Observe, plan, act, evaluate, reflect) 5.
20 pages (5000 words) Essay
Business Analysis of Bank of England
The first goal of the Bank is to protect the value of the money with respect to what it will acquire at home as well as with respect to other currencies. Monetary plan is aimed at accomplishing this goal and to offering a support for non-inflationary monetary development.
8 pages (2000 words) Essay
The World Bank and International Monetary Fund (IMF). Why Has Structural Adjustment implemented Proved so Controversial
The World Bank and International Monetary Fund (IMF) introduced structural adjustment programs, targeting developing countries in as preconditions for securing loans from the global financial institutions1. Since its inception, structural adjustment has had various impacts on the social economic development of the recipient countries.
13 pages (3250 words) Essay
Macro Economic Policies Adopted by the Bank of England
Any government has the power to regulate the economy of the country and not only does it regulate the economy, it has a vital role to ensure that the economic condition remains stable. It is the responsibility of the government to ensure that all the aspects of economy maintain a stable level so that the country can grow and expand.
3 pages (750 words) Essay
Bank of England and the British Economy
There are three countries which make up the British Economy namely, England, Wales, Northern Ireland and Scotland. This paper will throe light upon how successful the government and the Bank of England have been in running the British economy over the past two years.
3 pages (750 words) Essay
Barclays bank approach to system implementation ((business information system))
Considering that the bank had over 2000 branches in which the new system was to be implemented, running two systems would mean extra workforce to be added to the
4 pages (1000 words) Essay
Differences among Bank of Canada, the Bank of England, and the Bank of Japan
The Minister of Finance owns the corporation because the Minister of Finance of Canada holds the bank’s entire capital share (Yasin, 2013). The Bank of England was founded to function as the Government banker of the English. The bank still functions as the banker for
1 pages (250 words) Essay
What is the Bottom of the Pyramid approach, and why is it consider controversial
The group that constitutes the BOP is thought to be over 4billion as postulated by the proponents of this approach and earn averagely $2 per day. Further, the proponents of BOP emphasises that
2 pages (500 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic The Controversial Approach of the Bank of England for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us