Which institution serves as the central bank of the United Kingdom and was founded by Parliament?

Which institution serves as the central bank of the United Kingdom and was founded by Parliament?

• A. Federal Reserve
• B. European Central Bank
• C. Bank of Scotland
• D. Bank of England

Answer: (D)

The Bank of England is the United Kingdom’s central bank, created by an Act of Parliament in 1694 to help fund the government. This founding by Parliament is why it’s closely tied to the state’s financial framework. As the central bank, it oversees monetary policy (through the Bank Rate and the Monetary Policy Committee), issues banknotes in England and Wales, acts as lender of last resort to the banking system, and maintains financial stability and smooth payment systems. The other institutions listed serve different roles: the Federal Reserve is the U.S. central bank, the European Central Bank serves the euro area, and the Bank of Scotland is a commercial bank, not the country’s central bank.