Bankster 'Sir' Mervyn King: stop 'demonising' the banksters

Sir Mervyn King, the outgoing head of the private Bank of England, has called for an end of bankster bashing saying it’s wrong to “demonise individuals” for the failure of the financial system success of usury.

(Edited by WD)

By Louise Armitstead: Sir Mervyn, who presented his last quarterly forecasts last week, said “what bankers did is not the only explanation of the crisis that we had.”

In a valedictory interview he said: “Don’t demonise individuals here. This wasn’t a problem of individuals, this was a problem of failure of a system. We collectively allowed the banking system to become too big, we gave them far too much status and standing in society and we didn’t regulate it adequately by ensuring it had enough capital.”

The Governor told Sky News the reforms being made to the way the City was regulated would result in a “revolution in the way in which banking is handled and we will be able to be proud again of British banking”.

“In a couple of years’ time we could, if we carry on the right path, get to a point where we would be best practice in the regulation and structure of our banking system,” he said. “Then instead of people trying to mock British banking, as they did in 2007/8 when things went wrong, they will actually look and say, well actually they did learn the lessons.”

Sir Mervyn said he hoped Britain could “get back as quickly as we can to a healthy normal economy”. He said there “is no place” for the Government’s Help to Buy scheme in the “long run”. He said the flagship scheme to help people on to the first rung of the housing ladder “is a little too close for comfort to a general scheme to guarantee mortgages.”

Sir Mervyn that although “we certainly can’t be satisfied” with the modest economy recovery, he argued that Britain’s low growth was not due to any internal problems such as weak manufacturing or industry, but sluggish global demand. “I don’t think we should worry about our ability to do [manufacturing],” he said. “What we should worry about is that demand in the rest of the world, particularly in Europe, is very weak and that the situation overseas is a very difficult one in which to rebalance our economy. If the rest of the world were growing at its average historical rate, growing as normal, we’d be in a pretty strong position by now.”
He said that the “single biggest risk” to the UK economy “is that the euro area continues to grow very slowly or, as it is in now, in a recession.”
Ahead of official inflation figures due to be published this week, Sir Mervyn said he was proud of his record on keeping a tight rein on inflation during his tenure.
“The one thing that we have achieved over the last 20 years is to get away from the period [of] the 1970s when inflation got to 27pc in one year and in the 1970s it averaged over 13pc a year right through the whole decade. That was devastating to our economy and we must never go back to that.”
Sir Mervyn praised his successor, Mark Carney, Governor of the Bank of Canada, who takes over from him on July 1. “Mark is a very smart person, the country is fortunate to have someone like Mark coming in. I think everyone will admire what he will achieve,” he said.
He said the appointment of a foreigner was a credit to Britain. “In talking to my central bank colleagues around the world, they often start by thinking of Britain as a rather insular country,” he said. “Not one of them, not one of them would have the courage to appoint a foreigner to be Governor of the Bank of England.
Sir Mervyn said he would not be offering Mr Carney advice. “Obviously if anyone wants to call me, if they can get me on the phone I will be happy to give advice but I shall be leaving, making a clean break.”

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