How it normally works is that individuals can apply for loans from high-street banks, who charge an appropriate level of interest.

The banks get the money from savers' deposits - and also they may borrow directly from a central bank (for example in the UK, the Bank of England). The central bank's interest rate will be lower than that of the lending rate of the high street bank. This differential is how banks make money.

Can a private individual borrow directly from the Bank of England?

If not, then can a privately-owned company borrow directly?

If not, why not?

Where is the line drawn to say that some people or corporations can do business directly with the central bank, but others can't?

Tried looking this up and found this, which contains a similar question but no actual answers.

  • 2
    How do high street banks handle all those loans? With specialized computer software, customer facing networks and a lot of customer service representatives. Do you want the BoE to spend lots and lots of your tax dollars to become a High Street bank? Or should it be left to do what it does best?
    – RonJohn
    Feb 2, 2020 at 21:06
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    If the BoE started spending dollars, I'd be quite concerned. Feb 2, 2020 at 21:08
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    The Bank of England's own page Banking services seems to explain things very well... in a nutshell, they are the bank of the government/country, and therefore don't compete with commercial banks.
    – TripeHound
    Feb 3, 2020 at 9:06
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    "The banks get the money from savers' deposits" - no, they're not loaning existing money. When they make a loan, they just create a new deposit liability, and a corresponding asset. See bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/… or most other resources on money creation. Feb 3, 2020 at 10:22
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    Incidentally, at least in the US, the central bank also imposes creditworthiness and collateral requirements. Even a bank can't get the primary credit rate if it's not financially sound enough, and even a bank needs to provide collateral. Feb 3, 2020 at 10:55

3 Answers 3


The answer is "because of the policies of the national bank".

The chief example here is the ECB, which does lend money to private companies, but only in the form of open-market transactions. The ECB buys company bonds which are publicly listed.

Your private loan may very well be bundled by your bank in a group of private loans and be traded, but this bundle is not publicly listed.


In short, no.

In the countries I know of (not many though) you need a bank permit “oktroy” to borrow directly from the central bank. There are limits to maximum borrowing allowed set for each bank. The limits might be up to the amount of securities depositas at the central bank.


As an employee you used to be able to have a Bank of England account, so I would assume that yes a loan was available. However this was stopped in 2015 according to this article. https://www.theguardian.com/business/2016/jul/17/bank-of-england-closing-personal-banking-service-employees

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