Mr Majestic
Information Access Team
via email to:
Communications Directorate
request-556661-
T 020 3461 4878
xxxxxxxx@xxxxxxxxxxxxxx.xxx
F 020 3461 5460
request-556667-
xxxxxxxxx@xxxxxxxxxxxxx.xx.xx
xxxxxxxx@xxxxxxxxxxxxxx.xxx
12 March 2019
Please quote ref. CAS-05906-Y7F1F0 and CAS-
05907-V5J6Y7 on all correspondence
Dear Mr Majestic
Thank you for your emails of 27 February to the Bank of England (the ‘Bank’) which includes the
Prudential Regulation Authority, in which you ask the following under the Freedom of Information Act 2000
(‘FoI Act’):
‘the link between gold and banknotes being broken in the 1931 gold standard act.
1. What did the receipt ant (public) get for this remedy?
2. Where and what happened to the gold that the receipt ant (public) had in the banks?’
May I first explain that the FoI Act provides a general right of access to recorded information held by a
public authority. It does not require a public authority to answer general questions on a subject as is the
case in this instance. However, you may find the following of interest.
Since its foundation in 1694 the Bank has issued banknotes promising to pay the bearer a sum of money.
For much of its history the promise could be made good by the Bank paying out gold in exchange for its
notes. The link with gold helped to maintain the value of the notes, although the link was sometimes
suspended, for example in wartime. As you know, the link with gold was finally broken in 1931 and since
that time there has been no other asset into which holders have the right to convert Bank of England
notes. They can only be exchanged for other Bank of England notes. Nowadays public faith in the pound
is maintained in a different way - through the Bank of England's operation of monetary policy, the object of
which, by statute, is price stability.
You can read about the framework for the operation of monetary policy and the remit for price stability on
our website at:
www.bankofengland.co.uk/monetary-policy
Following the end of the Gold Standard in 1931 the gold and foreign exchange reserves were transferred
to HM Treasury, these reserves are still managed by the Bank on behalf of the Government. Further
information about the reserves can be found on our website at:
https://www.bankofengland.co.uk/markets/foreign-currency-reserves Yours sincerely
Sandra Collins
Information Access Team
Bank of England, Threadneedle Street, London EC2R 8AH T +44 (0) 20 3461 4444 www.bankofengland.co.uk
2
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