Former Bank of England governor claims Labour government not to blame for last financial crash

Mervyn King, formerly Bank of England governor from 2003 to 2013, was speaking on the BBC's Today Programme

Rose Troup Buchanan
Monday 29 December 2014 15:50
Comments
Four years-plus of near-zero rates under Sir Mervyn King decimated an already fragile savings culture
Four years-plus of near-zero rates under Sir Mervyn King decimated an already fragile savings culture

The former Bank of England governor Mervyn King has denied that the previous Labour government was responsible for the last financial crash.

Mr King has previously alluded at select committee sessions that the Labour government allowed public spending to rise too fast – but his remarks while guest editing the BBC’s Today Programme this morning are the clearest exoneration yet of the party’s role in the financial crash of 2008.

“I am not going to talk about individual parties’ culpability because I think the real problem was a shared intellectual view right across the entire political spectrum and shared across the financial markets that things were going pretty well,” he said.

“There were imbalances – we knew things were unsustainable – but it was not entirely obvious where it would come unstuck – and I think that is something everyone shared, and the right thing is to make it better for the future.”

Mr King, who was governor of the Bank of England from 2003 to 2013, has apologised in the past for the actions of financial bodies and policy makers, in 2012 admitting: “We let it slip” and acknowledging people were “entitled to be angry” in an interview with the BBC.

“Looking back the leverage of banks was absurdly high and should have been lower,” he said today.

“I don’t think there is any point blaming them for it. It came as an enormous surprise to everyone that banks were not creditworthy.”

He cautioned there was still significant work to be done, confessing that he was unsure whether politicians had “yet got to the heart of what went wrong”. And added he was not yet sure the banking system was safe enough.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in