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Banking crisis ‘as bad as a world war’

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The banking crisis has been as damaging to the UK economy as a world war, a top Bank of England (BoE) official has said.

Andrew Haldane, the BoE’s executive director in charge of financial stability, said the damage done to income and output was “as bad as a world war”.

“That is the scale we are talking about,” Haldane said in an interview with the BBC.

He said the crisis would have a lasting impact on the economic health of the country.

Speaking to BBC Radio 4’s The World at One programme, Haldane said: “If we are fortunate, the cost of the crisis will be paid for by our children. More likely it will still be being paid for by our grandchildren.”

He also suggested public anger over the level of bankers’ pay was justified.

“Back in 1980, your average investment banker was paid the same as your average lawyer or doctor.

“By the time we got to 2006, they were being paid four times as much.

“A massive discrepancy had been built up, that is now being steadily eroded. It may take some years. Have we got further to travel south? I suspect probably yes,” he said.

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