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Lord King warns on UK banking system

Former Bank of England governor Lord Mervyn King has warned the UK’s financial system is not “entirely safe”.

Speaking on BBC Radio 4’s Today programme yesterday, King questioned the banking system’s ability to withstand another crisis and argued the core problems that led to the meltdown have not yet been dealt with.

He said: “I don’t think we’re yet at the point where we can be confident that the banking system would be entirely safe.

“I don’t think we’ve really yet got to the heart of what went wrong.”

The warning comes despite banks and other financial institutions being forced to hold greater a greater percentage in capital, to prevent the risk of failure in the event of another downturn.

King, who was at the helm of the Bank of England during the crisis, went on to say that imbalances between global economies have not yet been resolved. He added keeping base rate at the low of 0.5 per cent cannot go on.

“The idea that we can go on indefinitely with very low interest rates doesn’t make much sense.” He added, however, that raising interest rates now “would probably lead to another downturn”.

The former Bank governor was criticised on Monday for describing his time working through the financial crisis as “exciting”.

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  1. I am not as knowledgeable as Mr King ( Bank of England Governor – but I believe, I am much more concerned – than he ! These Banks are a Law unto themselves and provided they keep up the payments of fines – to the Government – they are permitted to continue Doing Their Own Thing – despite the consequences to those whose life savings are at RISK ! The Old Adage that if you owe the Bank money and it goes down – it is their problem ! The REAL issue is that millions of people have NO ALTERNATIVE other than to have their earnings or their savings Laundered or FILTERED through various bank accounts – as there IS NO ALTERNATIVE . . . .and the Banks ability to fiddle interest rates under their MONOPOLY is a Great cause for CONCERN. In the same way Pension Trustess fiddle their figures to suit themselves with auditors like Price Waterhouse Coopers being purchased by the pension company – to DO WHAT THEY ARE TOLD – Rather than DO THE RIGHT THING ! gives no confidence in auditors OR Regulators. These companies are swindlers – acting against the best interests of the pension beneficiaries OR DEPOSIT HOLDERS EG Nationwide Instant Access account where Graeme Beale CEO covers up theft of cleit money – as his employees are directed ( and further protected ) against their REFUSAL TO PROVIDE INSTANT ACCESS for clients ( Mutual Policyholders ) savings . . . . . .

  2. For King to say that his successor hasn’t yet got the UK banking system into a state of bombproof security against the effects of another downturn is a bit like Labour throwing stones at the Conservative party’s handling of the economy.

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