'prickly' Sir Mervyn King Was Nearly Sacked By Labour Government

[interestrateripoff]

http://www.telegraph.co.uk/finance/economics/8734008/Prickly-Sir-Mervyn-King-was-nearly-sacked-by-Labour-government.html

The former Chancellor also confirms that he came close to sacking the Governor in 2008 but could not find a suitable alternative. Had his tenure not been renewed, Sir Mervyn would have been the first Governor in 50 years to be axed after serving just one term.

Mr Darling describes Sir Mervyn as "amazingly stubborn and exasperating". According to excerpts from Back from the Brink: 1,000 days at No 11 on the Labour Uncut website, he claims the "prickly and strained" relationship between Sir Mervyn and Lord Turner contributed to the regulatory failures ahead of the crash.

Confirmation that Sir Mervyn was almost sacked in 2008 will throw a spotlight on the amazing transformation in his fortunes.

Since the Tory-led Government came into power, he has won a turf war with the FSA to take financial regulation back into the Bank and been granted a series of new powers. In an unusual move, he was knighted this year while still in office.

I wonder if at any point Darling will accept Labour where part of the problem in this mess? I suppose that these regulatory failures had nothing to do with the politicians overseeing the regulators then.

[Si1]

http://www.telegraph...government.html

I wonder if at any point Darling will accept Labour where part of the problem in this mess? I suppose that these regulatory failures had nothing to do with the politicians overseeing the regulators then.

they will keep blaming the tory bankers forever on this one, same way they blamed the tory accountants who miscounted the nation's debt (apparently) in the late 1970s

even when labour are in power, it's always the tories' fault

[inflating]

Headless chickens frequently tend to blame each other

[Bruce Banner]

they will keep blaming the tory bankers forever on this one, same way they blamed the tory accountants who miscounted the nation's debt (apparently) in the late 1970s

even when labour are in power, it's always the tories' fault

Conversely, when the Tories are in power they always have to spend years sorting out the economy after Labour's spendthrift policies. So it is true to say that even when the Tories are in power it's Labour's fault.

Why do people ever vote Labour? I don't know as I never have!

[tomandlu]

I wonder if at any point Darling will accept Labour where part of the problem in this mess? I suppose that these regulatory failures had nothing to do with the politicians overseeing the regulators then.

In fairness, they were all (and remain) incompetent dicks.

I have a dream... a socialist government that remembers to take a calculator to work... actually, any government that remembers to take a calculator to work would be a start.

Sound economics should be the start and largely the end for all government. Everything else is just icing and marzipan.

[tinker]

Politicians have to 'promise' things, it's a small step to an outright 'lie.'

The electorate like a battered wife always take the scoundrel back, believing he'll change or it has to be this way.

Sound finance should be the cornerstone of a government term (an obligation), that said, didn't Brown preach 'prudence' and 'golden rules' during his chancellorship as if things were in order, most believed him at the time, after all they were 'boom times' apparently. Debt is wealth remember.

[Injin]

Conversely, when the Tories are in power they always have to spend years sorting out the economy after Labour's spendthrift policies. So it is true to say that even when the Tories are in power it's Labour's fault.

nice story, lovely soundbite, total rubbish.

Thatcher was the most aggressively small state tory to ever walk the earth. She didn't even stop the state or it's debts from growing, never mind reverse it or balance the books. It's actually gone like this - labour allocate debt and spending towards social goals (foolish, doesn't work but sorta noble I guess) then the tories get in and reallocate government debt and spending to their rich chums in the city.

Either way debt has ncreased, the state has grown larger and the bankers have been given even more power.

Why do people ever vote Labour? I don't know as I never have!

Because they don't like being robbed blind by the rich and foolishly think labour can/will help?

----

Mervyn King is well known for being narky, to add to the OP. Famously short tempered, but keeps a lid on it in public.

[inflating]

Often find people who are short-tempered use it as a defence mechanism to divert from their lack of knowledge, they snap at people in an attempt to halt any enquiry that could lead to greater awareness of their areas of inferiority

[Tankus]

banksters made more money out of gordon brown than they ever have done out of any previous government

..the rich poor divide has got worse under labour

the conservatives ran a surplus from 1994 which was then blown by brown to buy the second election

[Arbitrage]

they will keep blaming the tory bankers forever on this one, same way they blamed the tory accountants who miscounted the nation's debt (apparently) in the late 1970s

even when labour are in power, it's always the tories' fault

You REALLY think that there's a difference between New Labour and the the Tories?

The mainstream parties are just front men - working for the corporations, who are the real ones in power.

Wake up and smell the coffee

[SHERWICK]

nice story, lovely soundbite, total rubbish.

Thatcher was the most aggressively small state tory to ever walk the earth. She didn't even stop the state or it's debts from growing, never mind reverse it or balance the books. It's actually gone like this - labour allocate debt and spending towards social goals (foolish, doesn't work but sorta noble I guess) then the tories get in and reallocate government debt and spending to their rich chums in the city.

Either way debt has ncreased, the state has grown larger and the bankers have been given even more power.

Because they don't like being robbed blind by the rich and foolishly think labour can/will help?

----

Mervyn King is well known for being narky, to add to the OP. Famously short tempered, but keeps a lid on it in public.

Wrong.

labour allocate debt and spending towards social goals (foolish, doesn't work but sorta noble I guess) AND THEIR RICH CHUMS IN THE CITY, then the tories get in and reallocate government debt and spending to their rich chums in the city.

[SHERWICK]

Often find people who are short-tempered use it as a defence mechanism to divert from their lack of knowledge, they snap at people in an attempt to halt any enquiry that could lead to greater awareness of their areas of inferiority

SHUT IT

[Georgia O'Keeffe]

banksters made more money out of gordon brown than they ever have done out of any previous government

..the rich poor divide has got worse under labour

the conservatives ran a surplus from 1994 which was then blown by brown to buy the second election

I wonder what was happening then, oh yeah the Tech Boom was transferring debt on to corporate balance sheets, eerily the socialists in power in the US managed to run the same surplus and the Republicans who took over in 2000 blew it away when the corporate balance sheets started imploding, strange that, im sure its got nothing to do with the economic debt cycle though just one of those strange quirks, no correlation to see here

Edited September 1, 2011 by Tamara De Lempicka

[A.steve]

I wonder if at any point Darling will accept Labour where part of the problem in this mess? I suppose that these regulatory failures had nothing to do with the politicians overseeing the regulators then.

I'm amused (not surprised) that a disagreement between King and Turner should lead government to consider King's termination rather than Lord Turner... Given that Labour stripped the BoE of operational oversight of the banks in 1998, I can understand the BoE Chairman being 'prickly' when the FSA (who had been formed to take on the responsibility of regulation) had catastrophically failed... yet the politicians aimed to lay the blame at his door.

The idea that Labour might sack King was what prompted several people here to start an e-petition. It didn't get the votes associated with populist low-intellect ideas... but I'd like to think HPC's regulars had some small influence. Compared to the Treasury Select Committee, King was supremely informed, open and competent - though, I do admit, perceptions were likely helped by the fact that everyone around him was supremely uninformed, disrespectfully oblique, disingenuous and generally incompetent.

[leicestersq]

I'm amused (not surprised) that a disagreement between King and Turner should lead government to consider King's termination rather than Lord Turner... Given that Labour stripped the BoE of operational oversight of the banks in 1998, I can understand the BoE Chairman being 'prickly' when the FSA (who had been formed to take on the responsibility of regulation) had catastrophically failed... yet the politicians aimed to lay the blame at his door.

The idea that Labour might sack King was what prompted several people here to start an e-petition. It didn't get the votes associated with populist low-intellect ideas... but I'd like to think HPC's regulars had some small influence. Compared to the Treasury Select Committee, King was supremely informed, open and competent - though, I do admit, perceptions were likely helped by the fact that everyone around him was supremely uninformed, disrespectfully oblique, disingenuous and generally incompetent.

The Bank of England were certainly mad at losing responsibility for regulating the banks. They then sort of wanted the FSA to fail so they could get the responsibility back, well the FSA certainly failed alright. Of course King couldnt ask for this responsibility back directly, in public or private, all they could do was drop hints.

The BofE, King in particular has had a good record of predicting events of recent years. I recall King saying that the 'Age of Nice' was coming to an end.

One thing that the BofE hasnt been able to predict or control though, has been inflation, which is ironically one of their main mandates. Even here I suspect, they are more than happy with an inflation rate of around 5%.

[Riedquat]

Wrong.

labour allocate debt and spending towards social goals (foolish, doesn't work but sorta noble I guess) AND THEIR RICH CHUMS IN THE CITY, then the tories get in and reallocate government debt and spending to their rich chums in the city.

If by "social goals" you mean things that look impressive, instead of the boring dull bits that you actually need to make those things work (i.e. new schools and hospitals, without really giving a damn about teachers and hospital beds to put in them) then you're right.

[bajista]

I'm amused (not surprised) that a disagreement between King and Turner should lead government to consider King's termination rather than Lord Turner... Given that Labour stripped the BoE of operational oversight of the banks in 1998, I can understand the BoE Chairman being 'prickly' when the FSA (who had been formed to take on the responsibility of regulation) had catastrophically failed... yet the politicians aimed to lay the blame at his door.

Hmmm. The fact that Turner didn't take over as chairman of the FSA until 2008 might have something to do with it. He started in September 2008.

The damage was done by the time everything blew up in that month, so he can hardly be blamed for it. The Northern rock saga was already 12 months old at this point.

But then this begs the question, how could the relationship between King and Turner have had any bearing on the creation of the crisis ? ( though it might conceivably have influenced the route taken from that point on)

[A.steve]

The Bank of England were certainly mad at losing responsibility for regulating the banks. They then sort of wanted the FSA to fail so they could get the responsibility back, well the FSA certainly failed alright. Of course King couldnt ask for this responsibility back directly, in public or private, all they could do was drop hints.

The BofE, King in particular has had a good record of predicting events of recent years. I recall King saying that the 'Age of Nice' was coming to an end.

One thing that the BofE hasnt been able to predict or control though, has been inflation, which is ironically one of their main mandates. Even here I suspect, they are more than happy with an inflation rate of around 5%.

I agree, I think. My only caveat is that I doubt that 'inflation' (CPI or RPI inflation, that is) can be controlled by interest rates. I believe they could be used for fine-tuning... but there are so-many external factors that exert larger influences, I think it stands to reason that inflation targeting (like exchange rate targeting) are both false targets... Isn't it obvious that it is ludicrous to want commodity price stability while supporting exponential asset price increases? In our current predicament, the only reasonable route to profit is fraud - and that's not very beneficial to mankind.

I think it's a positive move that operational oversight has moved back into the remit of the BoE... the structure of the FSA assured failure... The BoE doesn't assure success, but it's one nail in the coffin removed from the equation. The regulator needs to be independent - and you don't get that if there's a tacit agreement that the FSA officials will work for a few years for "peanuts" before cashing in with lucrative industry positions... assuming they weren't "too harsh". That had to change.

[SHERWICK]

If by "social goals" you mean things that look impressive, instead of the boring dull bits that you actually need to make those things work (i.e. new schools and hospitals, without really giving a damn about teachers and hospital beds to put in them) then you're right.

Yes that's what I mean.

[A.steve]

But then this begs the question, how could the relationship between King and Turner have had any bearing on the creation of the crisis ? ( though it might conceivably have influenced the route taken from that point on)

In the wonderful world of (central) banking, perception is 'everything'... the way the past gets interpreted and presented has a lot to do with the future. Turner's optimal play would be to share the blame as widely as possible - to give him a base from which to salvage the FSA. This would be best for his career - but depended upon finding credible looking people to blame for the mess he'd inherited... other than his predecessor... whose credibility was already shot.

At the time Brown said he was considering not renewing King's contract, the crisis was in full-flow... politics and presentation were the key weapons... and King's plain style made it difficult to spin gibberish as if it were true. Sure, King might have been self interested - but he was the only commentator who was being coherent... this made him dangerous.

Edited September 1, 2011 by A.steve

[MrFlibble]

You REALLY think that there's a difference between New Labour and the the Tories?

The mainstream parties are just front men - working for the corporations, who are the real ones in power.

Wake up and smell the coffee

+1

Only difference is they tend to serve slightly different masters in a slightly different ways, but masters they serve...

[Si1]

You REALLY think that there's a difference between New Labour and the the Tories?

The mainstream parties are just front men - working for the corporations, who are the real ones in power.

Wake up and smell the coffee

tories aren't great, but not as hair raisingly stupid and passive-aggresively self-interested as Labour - they're overtly self interested instead, and the better ones are enlightened with it, which is the best you're gonna get from human beings

to paraphrase your wishful and foolish view - Labour (Kinnock Brown Scargil Prentice etc) were not in power, oh no sireee, Tory Blair was in power and he's a tory so it's the tories mess and Gordon Brown was mightily unlucky to lose power and saved us all, in fact his Mini Me Ed will do just that in 2015 by nationalising everything

Edited September 1, 2011 by Si1

[SHERWICK]

tories aren't great, but not as hair raisingly stupid and passive-aggresively self-interested as Labour - they're overtly self interested instead, and the better ones are enlightened with it, which is the best you're gonna get from human beings

to paraphrase your wishful and foolish view - Labour (Kinnock Brown Scargil Prentice etc) were not in power, oh no sireee, Tory Blair was in power and he's a tory so it's the tories mess and Gordon Brown was mightily unlucky to lose power and saved us all, in fact his Mini Me Ed will do just that in 2015 by nationalising everything

Balls will be a lot worse than Brown and Blair, believe me...

[Si1]

Balls will be a lot worse than Brown and Blair, believe me...

as far as I can tell Ed and Ed on the Labour front bench is electoral suicide, the tories have a h3ll of a lot of leeway ahead of the next election

has similarities to William Hague as tory leader in 1996, utter mis-selection, utter-misunderstanding of the national politic by the party's leaders, whatever his talents

[@contradevian]

It woz Facha's fault innit