1D.7.4.1.2 Structure and initial functions

• What financial strains prompted the establishment of the Bank of England in 1694?

  Wars against France
• The existing system of borrowing from private lenders was reliable and cost-effective for the government.

  False
• The Bank of England provided centralized financial management
• Match the feature with the correct financial entity:

  Court of Directors ↔️ Bank of England

  Individual ownership ↔️ Private Lenders
• What type of company was the Bank of England established as in 1694?

  Joint-stock company
• The Bank of England was governed by a court of directors
• The Bank of England's royal charter granted it exclusive banking privileges.
• What was one of the primary initial functions of the Bank of England?

  Raise funds for the government
• Order the initial functions of the Bank of England based on their significance:

  1️⃣ Raise funds for the government

  2️⃣ Manage the national debt

  3️⃣ Issue banknotes
• The Bank of England helped finance the War of the League of Augsburg by providing secured funding to the government.
• What type of funding system did the government rely on before the Bank of England was established?

  Private lenders
• The Bank of England played a crucial role in financing the War of the League of Augsburg
• England financed the War of the League of Augsburg by providing secured funding to the government.
• Before the Bank of England, the government faced high interest rates from private lenders.
• What war did the Bank of England help finance by providing secured funding to the government?

  War of the League of Augsburg
• The Bank of England's financial management was more centralized compared to private lenders.
• After the Bank of England's establishment, interest rates on government loans decreased.
• What two key functions of the Bank of England helped alleviate financial strains during the war?

  National debt management and issuing banknotes
• The Bank of England was established in response to the financial strains of wars against France.
• Why was a state bank needed in the late 17th century?

  To finance wars and manage debt
• The Bank of England was governed by a court of directors.
• What were the three core initial functions of the Bank of England?

  Raising funds, managing debt, issuing banknotes
• The Bank of England reduced funding costs and enhanced financial stability during the War of the League of Augsburg.
• What were two advantages of the Bank of England's operations during the reign of William III?

  Lower interest rates and improved stability
• The Bank of England's monopoly over banking services posed a potential challenge for competition.