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 central banking institution for the United Kingdom is the Bank of England. It was established by an Act of Parliament in 1694 to help fund the government, and over time it became the nation’s monetary authority—issuing currency, setting monetary policy, and acting as lender of last resort to the banking system to maintain financial stability. In 1997, it gained independence in how it conducts monetary policy, but it remains the central bank by law and function. The other options aren’t correct: the Federal Reserve is the United States central bank, the European Central Bank serves the euro area, and the Bank of Scotland is a commercial bank, not the UK’s central bank.