The 1946 Bank of England Act was passed in order to: “bring the capital stock of the Bank of England into public ownership and bring the Bank under public control”.
This was done by:
1) transferring the existing capital stock of the Bank (Bank Stock) to the Solicitor for the Treasury and
2) issuing to the owners of the Bank Stock the equivalent amount of stock created by the treasury (Government Stock – just over £11m of treasury notes were issued – bearing 3% interest).
A key objective of the BoE is to protect the stability of the UK Financial System:
“An objective of the Bank shall be to contribute to protecting and enhancing the stability of the financial systems of the United Kingdom” (1998 Act)
and it is empowered to do this by looking at the books of other banks and directing their activities:
“The Bank, if they think it necessary in the public interest, may request information from and make recommendations to bankers, and may, if so authorised by the Treasury, issue directions to any banker for the purpose of securing that effect is given to any such request or recommendation” (1946 Act).
In addition, the Bank is responsible for UK Monetary Policy:
“There shall be a committee of the Bank, to be known as the Monetary Policy Committee of the Bank of England, which shall have responsibility within the Bank for formulating monetary policy” (1998 Act).
The Bank supervises and licenses anyone wishing to set up in the business of banking within the UK and provides informal supervision of the City of London. Thus the Bank has a great deal of both formal and informal power over not only the money supply, but the financial system at large.
What has it done with that power in the last few years? This is (some) of what we have seen:
– Credit cards given to people to build debt (create money); houses given to people to build debt (create money). In each case the loan documents create the money. Every month the interest you are charged ‘creates’ money – it did not exist before.
– A bank gets into trouble (Northern Rock in UK, Bear Stearns in USA) and the government ‘lends’ it billions to ‘help out’ (they ‘create’ the money that is loaned). The billions are paid directly to other banks and never repaid.
– Every bit of created money is ‘leveraged’ 10, 100, 1000 times to create more debt, hundreds of trillions of pounds and dollars. This is called a pyramid – a Ponzi Scheme – you have to keep creating more new debt so you can pay the interest on the old debt.
– In the City of London (and every other major market), banks and hedge funds engage in ‘naked short selling’ where they sell shares in a company. Short selling involves selling shares that you do not own but have effectively ‘borrowed’.
– Naked short selling means that the shares are not even borrowed – they do not exist – they are counterfeit! Millions of new shares can come into existence and force down the price of a stock. If the firm goes broke (or is nationalised) the counterfeit shares never have to be delivered. By this means banks like Northern Rock, Bear Stearns and Lehman brothers are destroyed.
– All the while, massive, multi-billion pound bonuses are paid to the individual bankers responsible.
So from the level of an individual with a credit card or a mortgage, to the level of global investment banks we see destructive and fraudulent activity which is to the benefit of a few.
What role has the Bank of England played in all of this? – remember it should protect the stability of the UK financial system as well as regulate the money supply. It has been invisible – merely bleating on the sidelines. How come?
Who are the individuals involved with the bank? There are two main groups – the public face and the private face. The Court of Directors of the Bank are the public face: the Governor, deputy governors and other directors are all establishment figures, drawn almost exclusively from the banking, insurance or economist domains.
The private face? – secret – protected by both the Royal Charter status and the Official Secrets Act.
In 1977 the Bank of England created a wholly-owned subsidiary – Bank Of England Nominees Limited (BOEN) (no:1307478) with a share capital of £100 and two £1 shares issued. BOEN Objectives are:
“To act as Nominee or agent or attorney either solely or jointly with others, for any person or persons, partnership, company, corporation, government, state, organisation, sovereign, province, authority, or public body, or any group or association of them….”
Who runs BOEN, who does it serve? – secret – the company was granted exemption from the 1977 Companies Act disclosure requirements because: “it was considered undesirable that the disclosure requirements should apply to certain categories of shareholders”. There is a Freedom of Information request here with some information.
Nathan Mayer Rothschild was certainly one of the shareholders of the Bank of England, after he rescued the bank in 1826. He was the wealthiest man in England having, amongst other things, scammed the London Stock Exchange after the battle of Waterloo (after financing both Wellington and Napoleon). No doubt the Rothschilds still own government stock, along with other wealthy individuals such as the Queen.
Although the 1946 Act transferred ownership to the Treasury, it also gave control of the government stock to the previous owners:
“Trustees, executors and all other holders in any representative or fiduciary capacity of any Bank stock may hold, dispose of or otherwise deal with the Government stock issued in substitution there for in all respects as they might have held, disposed of or otherwise dealt with the Bank stock.” (1946 Act).
The net result is that the Bank Of England’s liabilities have been transferred to the public, while control and profits remain with the financial cartel which originally created it.
So we have a charade, veiled behind smoke and mirrors:
– A central bank is nationalised, but control of the stock remains in secret hands.
– Details of the bank stock transferred are hidden (did they include ‘toxic assets’ by any chance?).
– The nationalised bank creates a subsidiary which can act for anyone it chooses, but is also secret.
– The nationalised bank is run by individuals drawn from an elite financial establishment, who profit from the current financial crisis.
As the crisis deepened the government turned to these same people for help – the very same people who authorised the plethora of destructive financial derivatives and practices like naked short selling.
That power has been exercised in such a way that millions of people suffer and the gap between rich and poor increases dramatically.
It is no accident. The Governor and Directors of the Bank Of England have at the least been guilty of criminal irresponsibility and probably of being complicit in serious fraud. They must be investigated and charged as appropriate.
The Bank has failed – it must be abolished. We need to do things differently – kill the bank.