Mervyn King, the former Bank of England chief has said the UK’s financial sector is not yet safe from another financial crisis, despite new rules which force banks to hold more funds in reserve.
IBTimes reports that King, who retired from running the BoE a year and a half ago, said: “I don’t think we’re yet at the point where we can be confident that the banking system would be entirely safe.”
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He was being interviewed on Radio 4’s Today Programme. “I don’t think we’ve really yet got to the heart of what went wrong,” he said.
King said he expected interest rates to rise soon; the UK’s interest rate has remained at a low of 0.5% for the last five years.
“The idea that we can go on indefinitely with very low interest rates doesn’t make much sense,” he said.
However, if rates were to rise right now this would probably lead to another downturn, he added.
The former Bank of England governor also risked an angry backlash after describing the economic crisis as ‘great fun’, according to the Mail Online
At a time when thousands of Britons lost their jobs and struggled to pay their bills, Mervyn King appeared to be having the time of his life, as head of the UK’s central bank.
Lord King said that it was ‘exciting’ working at The Bank of England as they battled to prevent a repeat of the economic depression of the 1930s.