Bank of England governor Mark Carney, who has long been the most ardent proponent of a European Central Bank (ECB) role in stabilizing the eurozone, has announced the creation of the first of a new “cash cow” of banknotes and coins.
The banknote is a hybrid of the traditional British pound and the euro, with the first coins minted in Britain being the new British pound, a hybrid between the original British silver penny and the silver coinage of the Republic of Ireland, which is also a member of the European Union.
“In the past, there have been three major cash cows for banks in the eurozone,” Carney told reporters.
“The European Central, the European Financial Stability Facility, and now the Bank of Ireland.
And the banknote has the opportunity to be the next.”
The banknotes, which will replace the traditional Bank of Canada dollar, euro, British pound or French franc, will be minted using the metal “Eurobar” which has an intrinsic value of 100 grams and can be used to make new notes.
Carney said the banknotes will replace those existing notes that are also printed on a European currency, including the Euro.
He said the coins will be produced by the bank in the UK, with its facilities and equipment already being set up in the United Kingdom.
The new banknotes are part of a wider plan to overhaul the European Central Monetary System (ECMIS) in the wake of the global financial crisis, which has seen European banks and companies lose their financial stability in the face of low commodity prices and rising interest rates.
The banknote, which was launched in the Czech Republic on Wednesday, will replace an existing banknote that has been issued since 2007 and will be backed by the European Monetary Fund (EMF).
In October last year, Carney said that the ECB should be able to print new bank notes in the euro at a rate of up to 50 billion euros annually.
The ECB has already used that capacity to issue 100 billion euros in new bank bills, which were issued in October last month.
The new banknote will replace that, but the new bills are not due to be issued until mid-2020.
The central bank also said it will begin to issue new bank banknotes using the new Eurobar, which means that they will be issued using the European monetary fund, which the ECB says will be a “more flexible and less costly” alternative to the current Euro.
“The bank note is an attractive alternative to current Euro bank notes, which are issued on a silver and copper alloy that is highly vulnerable to counterfeiting and the risk of loss or theft,” Carney said.
“By 2020, the bank note will be an attractive, more stable alternative for banks, but at a much lower cost.”
Bank of England chief economist Andrew Haldane said in a speech to the British Chambers of Commerce that the new bank note would help to ensure the stability of the eurozone.
The British pound sterling dropped from $1.1462 on October 16 to $1,1386 on Wednesday.
The euro was worth 2.9615 Euros on Tuesday at 1:39 p.m. in Frankfurt.