The bank of england

Britain is a major financial centre, housing some of the world's leading banking, securities and other financial services and markets. The heart of the industry is the collection of banks and other financial institutions in and around the "Square Mile" in the City of London. This area has the greatest concentration of banks in the world - responsible for about 20 per cent of total international bank lending, the largest foreign exchange market in the world, with an average daily turnover of about $ 200 billion.

The Bank of England is the central bank of the United Kingdom. Most countries have their own central bank: the Federal Reserve System in the United States, the Deutsche Bundesbank in Germany, the Banque de France, the Bank of Japan.

The Bank of England was founded in 1694 and it is one of the oldest central banks of the world. It started as a commercial bank with private shareholders, and developed a large private banking business, but after 1946 it began to act as public institution carrying out public functions. Now it is considered to be the government's bank. The Bank has always had the right to issue bank notes in England and Wales, and acquired the monopoly after the Bank Charter Act of 1844. It is known as banker to both banks and the government increasing its influence on monetary policy. It accepts responsibility for advising the government to make the country's financial policy. The Bank also takes on a degree of responsibility for maintaining money and capital markets in London, and watches over the soundness of the banks.

The Bank's functions are: first, maintaining the value of the nation's money, mainly through policies and market operations agreed with the government, it regulates the money supply in the country which is one of the most important functions; second, ensuring the soundness of the financial system, including direct supervision of banks and participants in some City financial markets; and third, promoting the efficiency and competitiveness of the financial system, notably in the field of domestic and international payment and settlement systems, so that the City of London can serve industry and commerce at home and maintain its place as the world's leading international financial centre.

Financial statements

The final products of accounting are financial statements. Financial statements are means of communicating important accounting information to users: Management, banks, State Administration, Tax Authorities, suppliers, customers, investors. They show the business in financial terms.

Four major financial statements are used to communicate accounting information about a business: the Income Statement, the Statement of Owner's Equity, the Balance Sheet, and the Statement of Cash Flow. The Income Statement, the Statement of Owner's Equity and the Statement of Cash Flow give the time period (month, quarter, year), but the Balance Sheet gives the specific date to which it applies – e.g. December 31.

The main financial statements are the Income Statement and the Balance Sheet.

The Income Statement shows financial position of a business over a definite period of time. It summarizes the revenues earned and expenses paid by a business over a period of time. Many people consider it the most important financial report because it shows whether a business received profit or lost money. So, its main formula is: Revenues – Expenses = Gross Profit or Loss. Gross profit is profit before taxes. In Great Britain this statement is called Profit and Loss Account.

The Balance Sheet shows the financial position of a business on a certain date, usually the end of the month or year. For this reason, it often is called the statement of financial position and is dated as of a certain date. The Balance Sheet presents the quantity (in money measure) of business's assets, liabilities and owner's equity (capital). The accounting equation of the Balance Sheet is: Assets = Owner's equity + Liabilities

It can be seen that the two sides of the equation will have the same totals. This is because we are dealing with the same thing from two different points of view. The actual assets, liabilities and capital may change, but the equality of assets with that of the total of capital and liabilities will always hold true.