Governance and funding

We’re publicly owned

We are a public body that must answer to the people of the UK through Parliament. 

We started over 300 years ago as a private bank with shareholders. In 1946, the Government nationalised us because of our central importance to the UK’s economy. 

In 1997, the Government granted us independence in some areas of our work because they wanted our decisions to be free from party-political influence. 

Find out more about our history.

Our mission that drives us

Our mission is to promote the good of the people of the United Kingdom by maintaining monetary and financial stability. 

That includes things like making sure you can pay for things securely, keeping the cost of living stable, and ensuring you can rely on banking or payment services.

Read more about what we do.

A Court of Directors oversees our work

Our Court of Directors (similar to a board of directors) governs us. It sets our strategy and makes our most important decisions on spending and appointments. 

It consists of five full-time members – the Governor and four deputy governors – and seven non-executive directors. All are appointed by the Government. 

The Governor is our chief executive. The current Governor is Andrew Bailey.

Our Internal Audit Department helps our Court of Directors and executive team to protect our assets, reputation and sustainability. The division independently and objectively evaluates the effectiveness of our internal controls, risk management and governance processes. This work is guided by our internal audit charter.

Committees make our main policy decisions

The three committees that make our most important policy decisions are the: 

• Monetary Policy Committee
• Financial Policy Committee
• Prudential Regulation Committee

These are all chaired by the Governor. They include people from outside the Bank of England who have relevant knowledge or experience (we call them ‘external’ committee members).

These policy committees each have a distinct interest in the balance sheet of the Bank of England. The Bank has published a set of principles of engagement for the governance of the Bank’s balance sheet. This sets out how and when each committee – together with the Bank’s Court of Directors - will be engaged on matters concerning the Bank’s balance sheet.

We answer to Parliament 

Parliament’s House of Commons Treasury Committee publicly holds us to account. It regularly asks our Governor and other senior representatives to explain how and why we arrive at our decisions.

In particular, it asks questions about our approach to monetary policy, financial stability and prudential regulation.

It also questions new members of the three policy committees before they start their role. 

Find transcripts, reports and videos of these events on the UK Parliament website.

See published correspondence with Parliament.

The law that governs us 

The main legislation (law) that governs us is the Bank of England Act 1998 and the Charters. 

Working with other organisations

We work very closely with other organisations at home and abroad. We have formal agreements (called ‘memorandums of understanding) with some, including the UK Treasury and the Financial Conduct Authority and many overseas central banks. 

The agreements make it easier to share information so we can carry out our supervisory activities effectively. 

How we’re funded

Although we are a public body, we do not get a budget from the UK Treasury. Instead, we generate the funds we need for our work by:

• investing the money banks have to hold with us (this is called the 'Cash Ratio Deposit scheme')
• charging the firms we regulate a fee
• providing banking services to our customers, who include overseas central banks
• charging for the cost of producing banknotes
• charging a management fee for services we provide to government agencies
• investing the capital we have built up over 300 years

We generate more income than we spend, so each year we contribute millions of pounds to the UK Treasury.

Read our short guide to Who pays for the Bank of England?

You can also find more information about our sources of funds in the financial review section of our Annual Report (page 40).

Our financial reporting

We publish accounts on the same basis as a normal company. We pay corporation tax on our profits and a dividend to the Treasury as shareholder. A memorandum of understanding with the Treasury sets out the dividend formula and the relationship to capital. 

Find out more about how we manage our tax responsibilities.