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King admits BoE banking crisis errors

3 May 2012

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King admits BoE banking crisis errors
Sir Mervyn Allister King - Governor, Bank of England and Chairman of the Monetary Policy Committee

Mervyn King has admitted the Bank of England (BoE) should have taken a stronger interventionist approach to resolving Britain's economic crisis.

During the 2012 BBC Today Programme Lecture in London yesterday evening (2 May), the governor of the central institution stated that the UK is recovering more slowly than had been hoped from its financial problems.

And Mr King believes the BoE did not identify hazards facing financiers in the lead up to the global banking collapse of 2008 effectively enough, meaning sufficient warnings were not provided.

"We did preach sermons about the risks. But we didn't imagine the scale of the disaster that would occur when the risks crystallised," he noted.

Mr King - who will leave his role in June 2013 following two full five-year terms - went on to say that the BoE should have "shouted from the rooftops" that a system where banks had borrowed too quickly and were too big to fail had been created.

By Gary Cooper

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