The Bank of England Governor says reform of the banking sector “is essential”
Bank of England Governor, Sir Mervyn King, admitted last night that he should of “shouted from the rooftops” his concerns in the run up to financial crisis of 2007-08.
Speaking in the BBC Today Programme Lecture, King said that for years the Bank had warned of the risks being taken by the financial markets, but that the decision made by Gordon Brown to strip it of its regulatory responsibilities had left it powerless.
“Why, you might ask, did the Bank of England not do more to prevent the disaster? We should have. But the power to regulate banks had been taken away from us in 1997. Our power was limited to that of publishing reports and preaching sermons. And we did preach sermons about the risks.”
The Governor also gave his support to the conclusions of the Independent Commission on Banking, chaired by Sir John Vickers, and moves that would ensure that the “complex and potentially risky trading activities” are kept separate from the parts of banks that hold depositors money.
He said: “For the sake of future generations, we too must be bold and decisive and, while the memory is fresh, learn the lessons from this crisis. Reform is essential.”
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