After the French defeated the Royal Navy at Beachy Head in 1690, King William III needed about £1.5 million, but lending to monarchs was risky. Scottish trader William Paterson proposed a public fund, and William Phips’s treasure from a sunken Spanish galleon set off a craze for joint stock investing. The Tonnage Act of 1694 incorporated the Bank of England, offering 8% interest and raising £1.2 million in 12 days from 1,268 subscribers, 12% of them women, with William and Mary each investing the £10,000 maximum. The bank moved to Threadneedle Street in 1734, and James Gillray’s 1797 cartoon named it the Old Lady of Threadneedle Street.

Nathan Mayer Rothschild shipped in gold to end the Panic of 1825, and the Bank Charter Act of 1844 gave the bank sole note-issuing rights backed by gold. In April 1913 suffragettes left a bomb in a milk churn outside; it was defused. In World War II staff worked in the vaults and printing moved to Hampshire. The Labour government nationalized the bank in 1946, and in 1997 Gordon Brown gave it operational independence with a 2% inflation target.

• Nazi Germany’s Operation Bernhard forgeries were estimated at over 10% of the face value of pound notes in circulation.
• If inflation misses the 2% target, the governor must write an open letter to the chancellor.
• Through the Prudential Regulation Authority, the bank stress-tests banks, credit unions and insurers.
• The bank settles around £500 billion in payments between banks every day through its RTGS system.
• An unredeemed 3% Treasury stock from the 1946 buyout still pays dividends to shareholders the bank cannot name.