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King: policymakers not ‘bad’ bankers caused crisis

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27/07/2012
Governor of the Bank of England, Sir Mervyn King, has admitted major mistakes were made by economic policymakers during the financial crisis.
King: policymakers not ‘bad’ bankers caused crisis

He said the crisis was down to these mistakes, not the bad behaviour of bankers, the Telegraph reports.

Speaking at the government’s Global Investment Conference in London, King indicated for the first time that he is partly to blame for failing to act before the crisis took hold in 2008.

He said: “Of course there was bad behaviour [by bankers]. But this was a crisis which emanated from major mistakes in macroeconomic policy around the world, and fundamentally the inability to successfully coordinate macroeconomic policy so that globally you wouldn’t get the imbalances, the capital flows, that created the difficulties in the banking system.

“We saw this going into the crisis, we kept meeting at the IMF, but we did nothing to solve it collectively, and I don’t think that this was a problem that could have been solved individually.”
He also said the global crisis would require a collective response, but added political union in Europe would be the wrong move.

King added: “Some of our American colleagues take the view it’s easy to solve the Europe crisis. Too many people assume Europe is one country, but we’re not one country, we’re several countries.”

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