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Bank Chief Admits Recession Was Not Caused By Labour

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In a blow to Tory Prime Minister David Cameron former Bank of England chief admits that Labour were not to blame for the recession

The Labour government was not to blame for the financial ­meltdown, the former Bank of England chief said yesterday.

Mervyn King, now Lord King, said “no government” could have prevented the recession which followed the global economic crash in 2008.

He said: “The real problem was a shared view across the entire political spectrum and the financial markets that things were going pretty well.

“I don’t think it is easy to go back and say any one country on its own could have found their way through it.”

Lord King was the Governor of the Bank of England from July 2003 and July 2013 and his comments will come as a bitter blow to David Cameron.

The Tory PM has frequently accused Labour of “crashing the economy” while in power in a bid to scare voters into backing the Tories instead.

But Lord King, a crossbench peer with no political allegiance, insisted: “We as one country could not have stopped the financial crisis.”

Problems in the banking sector had not been spotted by any major Government or federal bank around the world, he said.

http://www.mirror.co.uk/news/uk-news/bank-chief-admits-recession-not-4891142

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why bring in mortgage restrictions now then ?? if everything was fine before 2008 why change the rules now

the public debt sponge can absorb no more debt more like !, even with the "props"

Edited by longgone

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Of course Labour weren't responsible for a global financial meltdown.

I don't think even the most ardent of us Tories actually believes that.

Try telling that to Dave & George :rolleyes:

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He said: “The real problem was a shared view across the entire political spectrum and the financial markets that things were going pretty well.

“I don’t think it is easy to go back and say any one country on its own could have found their way through it.”

Entire political spectrum, fine. Hence why everyone here with any sense hates LibLabCon to this day.

HPCers called it, we really did.

Edited by Rave

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What's he saying? "The whole thing's not fit for purpose." Pardon? :lol:

And yes, HPCers did call it, but what's it got us.... 40 years renting from some bell-end who thinks he's an economic genius.

Happy NewYear!

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Self serving hideous apologists covering up their roles as active participants of incompetents do my head in - whilst many of us were saving into it, outbid and astonished with massive year-on-year hpi and others celebrating the miracle of forever hpi, now doubled down into it with rescues/reflation/QE/0.5%/making the would-be losers extra winners.

15 December 2007

Bank of England governor Mervyn King was warned two years ago that Northern Rock was in danger of collapse – but he brushed the concern aside dismissively.

Former Tory Cabinet Minister Gillian Shephard told Mr King she feared a 'day of reckoning' because Northern Rock was consistently offering cut-price home loans.

Mr King responded by telling her she did not understand banking and insisted there was nothing to worry about.

The confrontation took place in 2005 when Mr King went to the House of Lords to address Conservative peers.

A series of senior Tories, including Baroness Shephard and former Chancellor Norman Lamont, challenged Mr King about the soaring level of personal debt.

They argued that many families owed vast sums and that the authorities had a responsibility to take action before the problem became worse.

Mr King said the situation was being monitored by the Bank of England and was under control.

"The vast majority of the debt is secured against a property and it would be of concern only if that was not the case," he argued.

in full http://www.dailymail.co.uk/news/article-502590/Bank-England-governor-warned-Northern-Rock-collapse-years-ago.html

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To expect a substantially different direction of travel from any of the main political parties over the last decade is hopelessly naive. My suspicion is that if anything the Tories would have allowed even greater corporate excesses before the bailouts given their publicly expressed, if somewhat biased in execution, free market/neoliberal ideological leanings.

King is right in that respect that no government (we are likely to get) could have prevented it. Of course, the question then becomes why on earth do we have these parasitic scumbags in charge anyhow if by their own admission they are powerless?

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Of course Labour weren't responsible for a global financial meltdown.

I don't think even the most ardent of us Tories actually believes that.

Yes, there is no direct political or personal responsibility to keep the IRs higher than necessary to avoid asset bubbles. Because they are all morons, who want to win next elections for all costs via promising freebies to the sheep.

Plus King is an idiot, par excellence. And he should be ashamed of himself. It looks like that he has no clue about the economical and bubble cycles. Unbelievable idiot!

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King is right in that respect that no government (we are likely to get) could have prevented it. Of course, the question then becomes why on earth do we have these parasitic scumbags in charge anyhow if by their own admission they are powerless?

Nope, you are wrong. Brown and King could increase the IRs in 2004 to kill the HPI and there would be no British internal 2007 crises; started with NRock.

But Brown wanted to win elections and King is useless or stupid; or both.

A single decision in 2004 could make the huge difference and we would look like Germany now.

However Prime London is now falling for last 6 months and nothing will stop the HPC monster ...

Edited by Damik

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Self serving hideous apologists covering up their roles as active participants of incompetents do my head in - whilst many of us were saving into it, outbid and astonished with massive year-on-year hpi and others celebrating the miracle of forever hpi, now doubled down into it with rescues/reflation/QE/0.5%/making the would-be losers extra winners.

Agree, he seems to be deflecting responsibility for the 2008 crash and the ensuing recession. Perhaps no government could have avoided recession, but I think Labour's main failures were:

- Did not make provision for (inevitable) cyclical downturn; for failing to mend the roof while the sun shines.

- Failure to ensure proper banking and financial regulation.

These are great responsibilities and it was a failure of duty (care) if nothing else.

HnH

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Apparently none of them could see the impending problems but the BoE was expert at putting them right.

For goodness sake all they did was print money and fiddle the figures.

They are such a hapless bunch of self serving incompetents.

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Of course Labour weren't responsible for a global financial meltdown.

I don't think even the most ardent of us Tories actually believes that.

What about the UK financial meltdown of liar loans?

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Problems in the banking sector had not been spotted by any major Government or federal bank around the world, he said.

Funny that, when schmucks like me with no financial qualifications were writing to the british arm of the central bank shithouse years before the bust asking them what the ****** they were doing stirring the debt pot.

Edited by onlyme2

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Problems in the banking sector had not been spotted by any major Government or federal bank around the world, he said.

Funny that, when schmucks like me with no financial qualifications were writing to the british arm of the central bank shithouse years before the bust asking them what the ****** they were doing stirring the debt pot.

Gillian Shepherd as far as I remember was the only politician raising concerns.

As for Merve the Swerve, to apportion blame (rightly) to Brown and his government (for the scale of the debacle) would have meant he would have been tainted too with failure to do his job properly.

When I am KIng there will be a law of 'Reckless Endangerment to the Economy.'

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Yes, there is no direct political or personal responsibility to keep the IRs higher than necessary to avoid asset bubbles. Because they are all morons, who want to win next elections for all costs via promising freebies to the sheep.

Plus King is an idiot, par excellence. And he should be ashamed of himself. It looks like that he has no clue about the economical and bubble cycles. Unbelievable idiot!

Yeah spot on.

(Although didn't interest rates rise from 3.5% to 5.75% between 2004 and 2008?)

And actually as a "proper" Tory I'd argue Gidiot and Dave have done more damage than Labour with their continued and constant interference this past 4/5 years.

Artificially low sub-1% interest rates their entire term plus socialist (in the corporate sense) props for the financial markets and the housing market.

My party is dead to me until the morons on its front benches have gone.

What's worrying all the "proper" old Labour voters have been saying the same thing as me about their party since Blair took over in the mid-90s.

UK politics is in a sorry state.

Edited by byron78

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What about the UK financial meltdown of liar loans?

Did Labour issue those loans or did global banks operating in a deregulated free market issue them?

The Tories actually wanted more deregulation at points than Labour pushed through during their term.

We honestly haven't got a leg to stand on.

At present the banks are pushing for increased deregulation again and I know which of the two main parties are more likely to grant that this time round (that'd be the dappy Etonian blue one with the addled twitchy twit of a Chancellor arguing in Brussels on behalf of bankers and their bonuses). The fact Ed might actually be Red must have the city sh1tting itself.

Edited by byron78

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The "failure" was in the belief (models) that markets are rational.

People still post that belief on here every day.

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No single government could have prevented it... ...but ours did not have to go balls deep into policies promoting year upon year of double digit HPI and runaway BTL leveraging.

King is an absolute c*** who is seeking to absolve himself by absolving Liebour

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Problems in the banking sector had not been spotted by any major Government or federal bank around the world, he said.

Funny that, when schmucks like me with no financial qualifications were writing to the british arm of the central bank shithouse years before the bust asking them what the ****** they were doing stirring the debt pot.

But spotted by plenty of individuals outside those spheres.

Tell's you something doesnt it?

Despicable how the politicians perrenial get out of jail free card is always 'well, the rest of them were no better'

WE KNOW! THE SCUMBAGS ARE IN CONTROL OF EVERY COUNTRY!

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From the OP's link


Mervyn King, now Lord King, said “no government” could have prevented the recession which followed the global economic crash in 2008.

He said: “The real problem was a shared view across the entire political spectrum and the financial markets that things were going pretty well

Isn't that one of the main reasons that the BoE is supposed to be independent - to spot stuff that the self serving and incompetent politicians can't or won't.

The real problem was that the BoE including Mervyn King rather than being independent turned out to be just as self serving and incompetent as the politicians.

Then what was Edward George saying in March 2007 (before the economic collapse) about the times when he was Governor before leaving in 2003.


21 March 2007

http://

www.belfasttelegraph.co.uk/business/exgovernor-george-says-bank-deliberately-fuelled-consumer-boom-28524833.html

The Bank of England deliberately stoked the consumer boom that has led to record house prices and personal debt in order to avert a recession, the former Bank Governor Eddie George admitted yesterday.

Lord George said he and his colleagues on the Monetary Policy Committee " did not have much of a choice" as they battled to prevent the UK being dragged into a worldwide economic slump by slashing interest rates. And he said his legacy to the current MPC was to "sort out" the problems he had caused.

...

...

"We knew that we were having to stimulate consumer spending. We knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term.

At that time Mervyn King was Deputy Governor so would be included in the "we". It's quite clear the BoE/Mervyn King did know all along about impending problems even if Mervyn King wants to deny that now.

Basically with each passing year the version of events seems to get further and further removed from the truth.

Just out of interest a HPC link starting from 2007


http://

www.housepricecrash.co.uk/forum/index.php?/topic/56863-eddie-george-ex-boe-chief-says/

and another one starting from 2012


http://

www.housepricecrash.co.uk/forum/index.php?/topic/178227-mervyn-king-we-were-late-to-the-game/

Edited by billybong

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The cancerous malignancy of Keynesian central banking is the root cause. The global crises in oil and property and the pending disasters in steel, mining and manufacturing are merely symptoms of that underlying deformation.

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