Britain: Mervyn King launches accurate and devastating attack on £1tn banks bailout - a message also hitting home for other worldwide bank bailouts
Mervyn King, the governor of the Bank of England, has launched a devastating but accurate attack on Britain's banks, describing the £1tn government support given to them as "breathtaking". In an articulate and brilliant speech last night, he made his clearest call yet for large banks to be broken up, King warned that the British people will be paying for the cost of the financial crisis for a generation. He said: "To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little or no real reform".
He told bankers not to return to the practices of two years ago before the credit crunch began. "It is important that banks in receipt of public support are not encouraged to try to earn their way out of that support by resuming the very activities that got them into trouble in the first place. "The sheer creative imagination of the financial sector to think up new ways of taking risk will in the end, I believe, force us to confront the 'too important to fail' question. Although there are no simple answers, it is in our collective interest to reduce the dependence of so many households and businesses on so few institutions that engage in so many risky activities," the governor said.
Mr. Kings message is not only seen of importance to Britain, but also to the US and every other nation which has been involved in these bailout practices, without strong regulations and oversight controls. As one financial analyst listening to Kings speech said, "the crises might look to be under control but in fact it is only beginning for real now".
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