With the 121st governor of the Bank of England, Andrew Bailey, set to take over on 16th March this year, we wanted to take a look at one of the UK’s oldest institutions and its figurehead.
What is the Bank of England?
The Bank of England is the UK’s central bank. It produces all the banknotes used in the UK and houses the UK’s gold reserves (a total of 400,000 bars worth over £200bn).
Founded in 1694 to act as banker to the government, the first ever governor was John Houblon – you may have seen his face on a £50 note between 1994 and 2014. The Bank was owned privately until the end of the Second World War, when it was nationalised by the government.
How long can you be governor for?
Officially, a governor has a term time of eight years. However, the 120th governor, Mark Carney, agreed to a five-year term with the option of an additional three years. He then agreed to extend his term twice, staying on longer due to delays caused by Brexit.
What does the governor do?
The governor will represent the UK in meetings with international bodies such as the G7 or the International Monetary Fund, while also chairing important internal committees such as the Monetary Policy Committee and the Prudential Monetary Fund. In addition to this, he is tasked with overseeing the Bank of England’s three main responsibilities:
- The Financial system: This is the system that connects people who want to save, invest or borrow money. The Bank of England monitors any risks within the system and tries to mitigate them – such as loaning to banks when necessary. It shares this responsibility with the Treasury and the Financial Conduct Authority.
- Individual banks: The Bank of England ensures that individual banks, insurers and building societies are of a suitable standard and are being run well.
- Inflation: The Bank of England tries to keep the cost of living as stable as possible by setting monthly interest rates and making sure that prices rise within the current target of 2% per year.
Have you got what it takes?
When Philip Hammond first put up the job advertisement for the role of governor in 2019, the description said that the successful candidate should have experience of being at the helm of a large financial organisation, good communication skills and “acute political sensitivity and awareness”. If that sounds like you, in eight years time there may be a £495,000 a year job opportunity for you.