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Guardian: Credit Crunch II

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Car loans, low rates, second mortgages: all the ingredients for a new credit crunch

credit crunch is brewing and when it happens, the UK is going to get hurt. That is the message emerging from senior executives in the financial services industry, who do not think Britain has changed that much since the 2008 credit disaster and the devastating crash that followed. Three developments lie at the heart of this disturbing analysis: spectacular growth in the sale of second mortgages, car loans and credit cards.

https://www.theguardian.com/business/2017/may/21/car-loans-second-mortgages-ingredients-for-new-credit-crunch

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.

Quote

credit crunch is brewing and when it happens, the UK is going to get hurt. That is the message emerging from senior executives in the financial services industry, who do not think Britain has changed that much since the 2008 credit disaster and the devastating crash that followed. Three developments lie at the heart of this disturbing analysis: spectacular growth in the sale of second mortgages, car loans and credit cards.

So the financial services industry who are responsible for 

Quote

Car loans, low rates, second mortgages: all the ingredients for a new credit crunch

have identified the problem and the risk already.  So they could do something about it themselves if they really wanted.

But no - it sounds like they want to play double bind with the public.  They're not in control and no doubt those actually in control will come out and say they're not in control either.

Just like the last time.  When it happens those in control will still say it was unexpected and nobody could have known and if they don't get a taxpayer/saver bail out they'll being the system down - again.

The Nu Credit Crunch came from ----------------------- (somewhere else and certainly not from within the UK).

Edited by billybong

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42 minutes ago, TulipsFromThreadneedle said:

Not to worry -

The Bank of England is also on the case. More importantly, it is also looking at the big picture and what happens if unemployment suddenly rises and a large number of households default on payments.

If they were on the case then surely this article would not exist.

Phew

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Vigilance 

1 hour ago, TulipsFromThreadneedle said:

Not to worry -

The Bank of England is also on the case. More importantly, it is also looking at the big picture and what happens if unemployment suddenly rises and a large number of households default on payments.

If they were on the case then surely this article would not exist.

+1

Precisely - if the BoE doesn't already know and can't itself describe the big picture and what happens if unemployment suddenly rises and a large number of households default on payments it just confirms what's been known for some time now - the BoE is not up to the job and is putting national security at risk.

Edited by billybong

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14 minutes ago, billybong said:

Vigilence 

+1

Precisely - if the BoE doesn't already know and can't itself describe the big picture and what happens if unemployment suddenly rises and a large number of households default on payments it just confirms what's been known for some time now - the BoE is not up to the job and is putting national security at risk.

That was confirmed a decade ago. I wonder if May will do anything about the BoE should she win the election. She said as much prior to winning the leadership of the Tory party and she is an insider so knows exactly what goes on.

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2 hours ago, TulipsFromThreadneedle said:

Not to worry -

The Bank of England is also on the case. More importantly, it is also looking at the big picture and what happens if unemployment suddenly rises and a large number of households default on payments.

If they were on the case then surely this article would not exist.

I understand why some might be drawn to 'Doomed, doomed - we're all doomed' narratives wherein all our institutions are useless or corrupt. However, narratives like that have always struck me as essentially pointless. I accept that that complaining about the weather constitutes socially acceptable small talk. I do not accept that the Bank of England has the same essential nature as the weather. Bank of England policy is malleable and it answers to both changing practical concerns and changing theoretical and ideological commitments.

In the UK we've endured the so-called 'madness of the mortgage lenders'. It persists to this day as interest-only buy-to-let lending and its dire consequences also endure for the million or so owner-occupiers who are 'mortgage prisoners' stuck with boom interest-only loans they will never be able to repay. However, the bulk of this lending occurred at a time when Browns tripartite lending had split supervision of the mortgage lenders between the FSA and the Bank and when the international banking accords enshrined a commitment to the idea that the best people to decide how much lending was too much  was not regulators but banks (and also equity investors in banks and investors who lend to banks). The role of the Bank of England in how we got here is relatively limited and there is very little a more active Governor could have done (given the remit and tools the Bank possessed) to have altered the course of events between 1997 and the present.

I got a great deal from slogging through Michael Collins history of money and banking in the UK. The long and short of  post-1979 Friedman inspired monetarism is that its proponents were all talk but much less action, and it didn't work anyway (as per John Crow who led the Bank of Canada from 1987-1994 "The Bank gave it a college try, it really did. It just doesn't work that way"). The electorate were sold on the idea that inflation could be controlled by controlling the money supply and the money supply was to be controlled by the level of interest rates. No central banker takes any of those ideas seriously any more.

One of the interesting things about credit money (sometimes called book money) as opposed to narrow money (the sort of money created by the central bank and used recently to purchase gilts, i.e. quantitative easing) is that it is very difficult for the Bank of England and Treasury to constrain the creation of credit money. Hire purchase arrangements are credit money creation. Credit cards are credit money creation. Arguably for all the attempt to make sure that they are not regulated as loans, PCP financing arrangements are really credit money. Monetarism really came to very little at least in part because economists have the toughest job of all - trying to find patterns in a system that changes its rules in response to any patterns you find. If you focus on money creation via bank lending then you just give the system an incentive to find ways of creating money that lie outside the central bank's ability to stop them.

The response to the Bank's failure in the face of this overwhelming complexity should not be the surmise that our institutions are useless, it should be a recognition that they are as imperfect as we are. Personally if there were false gods before 2008 it wasn't the Bank of England or even Brown; it was the bank executives who spilt metaphorical blood and literal treasure pushing through an international regulatory framework that was pure ideology and zero pragmatism. Our response to the crisis ought to be less ideology and more pragmatism. The idea that the Bank of England know exactly what they are doing is as daft as the idea that they are totally useless - and both ideas are very daft. The Mortgage Market Review (implemented April 2014) was a massive step forward enshrining pragmatism over ideology. The PRA rules on portfolio lending (in force from 30 September 2017) are another massive step forward.

Nobody is dragging anybody into banks and making them sign mortgage approval forms at gunpoint. The Bank of England have done a great deal, but they can only do so much.

 

Edited by Pumpkin Muad'Dib

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1 hour ago, billybong said:

Vigilance 

+1

Precisely - if the BoE doesn't already know and can't itself describe the big picture and what happens if unemployment suddenly rises and a large number of households default on payments it just confirms what's been known for some time now - the BoE is not up to the job and is putting national security at risk.

Indeed. They discuss unemployment and payment defaults as if human beings aren't involved. Counters on a chequers board.

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3 minutes ago, Pumpkin Muad'Dib said:

I understand why some might be drawn to 'Doomed, doomed - we're all doomed' narratives wherein all our institutions are useless or corrupt. However, narratives like that have always struck me as essentially pointless. I accept that that complaining about the weather constitutes socially acceptable small talk. I do not accept that the Bank of England has the same essential nature as the weather. Bank of England policy is malleable and it answers to both changing practical concerns and changing theoretical and ideological commitments.

In the UK we've endured the so-called 'madness of the mortgage lenders'. It persists to this day as interest-only buy-to-let lending and its dire consequences also endure for the million or so owner-occupiers who are 'mortgage prisoners' stuck with boom interest-only loans they will never be able to repay. However, the bulk of this lending occurred at a time when Browns tripartite lending had split supervision of the mortgage lenders between the FSA and the Bank and when the international banking accords enshrined a commitment to the idea that the best people to decide how much lending was too much  was not regulators but banks (and also equity investors in banks and investors who lend to banks). The role of the Bank of England in how we got here is relatively limited and there is very little a more active Governor could have done (given the remit and tools the Bank possessed) to have altered the course of events between 1997 and the present.

I got a great deal from slogging through Michael Collins history of money and banking in the UK. The long and short of  post-1979 Friedman inspired monetarism is that its proponents were all talk but much less action, and it didn't work anyway (as per John Crow who led the Bank of Canada from 1987-1994 "The Bank gave it a college try, it really did. It just doesn't work that way"). The electorate were sold on the idea that inflation could be controlled by controlling the money supply and the money supply was to be controlled by the level of interest rates. No central banker takes any of those ideas seriously any more.

One of the interesting things about credit money (sometimes called book money) as opposed to narrow money (the sort of money created by the central bank and used recently to purchase gilts, i.e. quantitative easing) is that it is very difficult for the Bank of England and Treasury to constrain the creation of credit money. Hire purchase arrangements are credit money creation. Credit cards are credit money creation. Arguably for all the attempt to make sure that they are not regulated as loans, PCP financing arrangements are really credit money. Monetarism really came to very little at least in part because economists have the toughest job of all - trying to find patterns in a system that changes its rules in response to any patterns you find. If you focus on money creation then via bank lending then you just give the system an incentive to find ways of creating money that lie outside the central bank's ability to stop them.

The response to the Bank's failure in the face of this overwhelming complexity should not be the surmise that our institutions are useless, it should be a recognition that they are as imperfect as we are. Personally if there were false gods before 2008 it wasn't the Bank of England or even Brown; it was the bank executives who spilt metaphorical blood and literal treasure pushing through an international regulatory framework that was pure ideology and zero pragmatism. Our response to the crisis ought to be less ideology and more pragmatism. The idea that the Bank of England know exactly what they are doing is as daft as the idea that they are totally useless - and both ideas are very daft. The Mortgage Market Review (implemented April 2014) was a massive step forward enshrining pragmatism over ideology. The PRA rules on portfolio lending (in force from 30 September 2017) are another massive step forward.

Nobody is dragging anybody into banks and making them sign mortgage approval forms at gunpoint. The Bank of England have done a great deal, but they can only do so much.

 

But having such a powerful central Bank obfuscates where the responsibility lies.

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2 minutes ago, Si1 said:

But having such a powerful central Bank obfuscates where the responsibility lies.

I'm not sure that the Bank of England is that powerful.

Look how long it took them to get Osborne to give them any role regarding buy-to-let lending. In the end they were forced to take the position that buy-to-let lending was a financial stability risk in order to do anything. Clearly, by the time you can make the case that something is a financial stability risk and thus intervene, it is already an actual financial stability risk. Even in 2014, the actual extent of their powers to prevent a risk developing were distinctly Catch-22; they could intervene provided it was already too late.

Looking backwards, this theme repeats, for example dealing with house price inflation in the long boom. Brown was the one that determined that the indices that the MPC were targeting did not include house prices, Brown took away any prudential role (which for example could have allowed the Bank to stamp out high-LTV interest-only lending to poor people because of the inherent risks to the borrower).

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15 minutes ago, Pumpkin Muad'Dib said:

I'm not sure that the Bank of England is that powerful.

Look how long it took them to get Osborne to give them any role regarding buy-to-let lending. In the end they were forced to take the position that buy-to-let lending was a financial stability risk in order to do anything. Clearly, by the time you can make the case that something is a financial stability risk and thus intervene, it is already an actual financial stability risk. Even in 2014, the actual extent of their powers to prevent a risk developing were distinctly Catch-22; they could intervene provided it was already too late.

Looking backwards, this theme repeats, for example dealing with house price inflation in the long boom. Brown was the one that determined that the indices that the MPC were targeting did not include house prices, Brown took away any prudential role (which for example could have allowed the Bank to stamp out high-LTV interest-only lending to poor people because of the inherent risks to the borrower).

Good explanation - I like your observation that something has to already be a risk to financial stability for the Bank to take action, by which time it is potentially too late. 

Perhaps the Bank should have started looking into personal loans sooner, but we know that its attention was on BTL from mid-2015  (and we should probably assume internally for some time before  that).

The Bank's remit is mainly around financial stability - much as the sight if white Range Rovers might offend our sensibilities, you would really need to show that these loans are a threat to financial stability to take action. 

The Bank also does a lot of stress testing of bank balance sheets these days - a good way to flush out where problems might lie. 

But I do think it has been too relaxed about the expansion of debtand had helped make things worse through the FLS etc. 

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1 hour ago, long time lurking said:

BTL  as most now require  a charge on the family home as security ?

I thought that, but thats not what the article said.

It should make clear whether its equity release, or eqity drawn out to purchase investment property.

My guess us that majority of btl post 2010ish have been bought with equity from oo. These people are idiots and will lose both. Tough tits.

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35 minutes ago, Pumpkin Muad'Dib said:

I'm not sure that the Bank of England is that powerful.

Look how long it took them to get Osborne to give them any role regarding buy-to-let lending. In the end they were forced to take the position that buy-to-let lending was a financial stability risk in order to do anything. Clearly, by the time you can make the case that something is a financial stability risk and thus intervene, it is already an actual financial stability risk. Even in 2014, the actual extent of their powers to prevent a risk developing were distinctly Catch-22; they could intervene provided it was already too late.

Looking backwards, this theme repeats, for example dealing with house price inflation in the long boom. Brown was the one that determined that the indices that the MPC were targeting did not include house prices, Brown took away any prudential role (which for example could have allowed the Bank to stamp out high-LTV interest-only lending to poor people because of the inherent risks to the borrower).

Defining the limits of their power does not rule out the possibility that they are too powerful.

 

But maybe I should rephrase all the same.

 

I believe the extent of their powers encompass political issues that govt should be held accountable for. The gap between the boe and the govt has become a very convenient and very large patch of long grass.

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33 minutes ago, Si1 said:

I believe the extent of their powers encompass political issues that govt should be held accountable for. The gap between the boe and the govt has become a very convenient and very large patch of long grass.

I agree with that. I recall Andrew Tyrie when still chair of the Treasury Select Committee raising the same point to Carney. We have this situation where hugely significant monetary interventions have come out of the Bank (encouraged and abetted by New Labour, Coalition and Conservatives at the Treasury since 2009) and have had massive re-distributional effects.

I reckon that a less independent Bank would have acted in a very similar way so arguably the illusion of central bank independence is (in the context of some material matters like quantitative easing) just window dressing. I guess what matters most of all is not who we pretend is controlling the printing press or what we imagine their motives to be. What matters is what they do with it, and what the alternatives were.

Edited by Pumpkin Muad'Dib

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25 minutes ago, Pumpkin Muad'Dib said:

I'm not sure that the Bank of England is that powerful.

Look how long it took them to get Osborne to give them any role regarding buy-to-let lending. In the end they were forced to take the position that buy-to-let lending was a financial stability risk in order to do anything. Clearly, by the time you can make the case that something is a financial stability risk and thus intervene, it is already an actual financial stability risk. Even in 2014, the actual extent of their powers to prevent a risk developing were distinctly Catch-22; they could intervene provided it was already too late.

Looking backwards, this theme repeats, for example dealing with house price inflation in the long boom. Brown was the one that determined that the indices that the MPC were targeting did not include house prices, Brown took away any prudential role (which for example could have allowed the Bank to stamp out high-LTV interest-only lending to poor people because of the inherent risks to the borrower).

(Warning, Chris rock, bad swearing, n-word)

'A n**** will say some shit like, "I take care of my kids." You're supposed to, you dumb mother******er! What kind of ignorant shit is that? "I ain't never been to jail!" What do you want, a cookie?! You're not supposed to go to jail, you low-expectation-having mother******er!' - Chris Rock

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13 minutes ago, Pumpkin Muad'Dib said:

I agree with that. I recall Andrew Tyrie when still chair of the Treasury Select Committee raising the same point to Carney. We have this situation where hugely significant monetary interventions have come out of the Bank (encouraged and abetted by New Labour, Coalition and Conservatives at the Treasury since 2009) and have had massive re-distributional effects.

I reckon that a less independent Bank would have acted in a very similar way so arguably the illusion of central bank independence is (in the context of some material matters like quantitative easing) just window dressing. I guess what matters most of all is not who we pretend is controlling the printing press or what we imagine their motives to be. What matters is what they do with it, and what the alternatives were.

I'd disagree with that last point of yours. What matters most is accountability, over and above technical correctness. There is economic and social value and feedback even from something as abstract as accountability.

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8 minutes ago, DrBuyToLeech said:

(Warning, Chris rock, bad swearing, n-word)

All well and good, but we get the Bank of England that the politicians determine we should get, and we get the politicians that we elect. The original post I was responding to (not yours, and not Si1's either) had this witless character that somehow because we'd like there to be an infallible central bank (which can reconcile conflicting objectives) then there's merit in moaning when there isn't one.

Looking after your kids is (with a bit of luck, e.g. no major illness) potentially achievable. Right or wrong, I feel that some of the moaning about the conduct of our actual regulators is just asinine, boiling down to nothing more than "I want them to be perfect and they aren't". Of course they fail, but what they are trying to do is a sight more difficult than putting food on the table.

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49 minutes ago, Si1 said:

I'd disagree with that last point of yours. What matters most is accountability, over and above technical correctness. There is economic and social value and feedback even from something as abstract as accountability.

OK, I buy that.

For clarity, I wasn't meaning to imply anything about correctness or technical correctness, so pulling your point and my point together I would say that what matters most is accountability and transparency.

In saying that 'what they do matters' I meant, for example, that it matters whether they print or whether they allow higher interest rates to blow up some zombies. The different actions will have different outcomes and the costs fall on different shoulders. I didn't mean to imply that anybody was in a position to determine a technically correct course of action. In fact I feel that the idea that anybody might be able to determine a correct course is a kind of myth that is exploited in order to allow politicians to use monetary policy without appearing responsible for consequences monetary policy.

We don't know what we're doing, but we have to do something. Whether the decision is taken in a relatively clandestine way at the Bank of England and framed as technocratic or taken in a much more open way and its political character is acknowledged really, really matters. We've chosen the former (or rather all three governments since 2008 have chosen the former). Obviously, we elected those governments.

IMO we would have been better off (in the abstract sense you propose) if we could have had a more straightforward national conversation about digging ourselves out of the hole we'd gotten into.

Edited by Pumpkin Muad'Dib

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2 hours ago, Pumpkin Muad'Dib said:

I understand why some might be drawn to 'Doomed, doomed - we're all doomed' narratives wherein all our institutions are useless or corrupt. However, narratives like that have always struck me as essentially pointless. I accept that that complaining about the weather constitutes socially acceptable small talk. I do not accept that the Bank of England has the same essential nature as the weather. Bank of England policy is malleable and it answers to both changing practical concerns and changing theoretical and ideological commitments.

In the UK we've endured the so-called 'madness of the mortgage lenders'. It persists to this day as interest-only buy-to-let lending and its dire consequences also endure for the million or so owner-occupiers who are 'mortgage prisoners' stuck with boom interest-only loans they will never be able to repay. However, the bulk of this lending occurred at a time when Browns tripartite lending had split supervision of the mortgage lenders between the FSA and the Bank and when the international banking accords enshrined a commitment to the idea that the best people to decide how much lending was too much  was not regulators but banks (and also equity investors in banks and investors who lend to banks). The role of the Bank of England in how we got here is relatively limited and there is very little a more active Governor could have done (given the remit and tools the Bank possessed) to have altered the course of events between 1997 and the present.

I got a great deal from slogging through Michael Collins history of money and banking in the UK. The long and short of  post-1979 Friedman inspired monetarism is that its proponents were all talk but much less action, and it didn't work anyway (as per John Crow who led the Bank of Canada from 1987-1994 "The Bank gave it a college try, it really did. It just doesn't work that way"). The electorate were sold on the idea that inflation could be controlled by controlling the money supply and the money supply was to be controlled by the level of interest rates. No central banker takes any of those ideas seriously any more.

One of the interesting things about credit money (sometimes called book money) as opposed to narrow money (the sort of money created by the central bank and used recently to purchase gilts, i.e. quantitative easing) is that it is very difficult for the Bank of England and Treasury to constrain the creation of credit money. Hire purchase arrangements are credit money creation. Credit cards are credit money creation. Arguably for all the attempt to make sure that they are not regulated as loans, PCP financing arrangements are really credit money. Monetarism really came to very little at least in part because economists have the toughest job of all - trying to find patterns in a system that changes its rules in response to any patterns you find. If you focus on money creation via bank lending then you just give the system an incentive to find ways of creating money that lie outside the central bank's ability to stop them.

The response to the Bank's failure in the face of this overwhelming complexity should not be the surmise that our institutions are useless, it should be a recognition that they are as imperfect as we are. Personally if there were false gods before 2008 it wasn't the Bank of England or even Brown; it was the bank executives who spilt metaphorical blood and literal treasure pushing through an international regulatory framework that was pure ideology and zero pragmatism. Our response to the crisis ought to be less ideology and more pragmatism. The idea that the Bank of England know exactly what they are doing is as daft as the idea that they are totally useless - and both ideas are very daft. The Mortgage Market Review (implemented April 2014) was a massive step forward enshrining pragmatism over ideology. The PRA rules on portfolio lending (in force from 30 September 2017) are another massive step forward.

Nobody is dragging anybody into banks and making them sign mortgage approval forms at gunpoint. The Bank of England have done a great deal, but they can only do so much.

 

Revisionist claptrap. Mervo the Clown was all too happy to be bracketed with Brown as co-author of 'no more boom and bust' during the good years. Afterwards, of course, as he attempted to slow the runaway train with a bedsheet, it was all Broon's fault.

Mervo wasn't there, he wasn't told, he was ironing his cricket box etc. :rolleyes:

http://www.telegraph.co.uk/finance/bank-of-england/10141232/Nice-Sir-Mervyn-King-still-allowed-the-ship-to-crash.html

Quote

The Sir Mervyn King farewell tour swung through Westminster yesterday. The outgoing Governor of the Bank of England, who steps down this weekend, was in front of the Commons Treasury Select Committee for the last time. For the entertainment of MPs, he played several of his old hits, including his best-known number, “It’s not my fault”.

Much of the audience seemed in a mood to lap it up. Andrew Tyrie MP, the normally unsentimental chairman of the committee who has in the past clashed with Sir Mervyn, paid a warm tribute to the Governor’s achievements. He praised his “tenacity” and talked of a great legacy at the Bank: “You are leaving the institution much stronger than when you found it.”

Sir Mervyn beamed, and no wonder. In recent weeks he has been treated to an extended version of the quintessential jolly retirement party that the British Establishment tends to throw for one of its own. There has been a swanky last supper at Mansion House, a gentle profile on the BBC’s News at Ten, and then, as is standard in these cases, a peerage. He was also awarded an even higher honour, when he appeared on Desert Island Discs with Kirsty Young.

However, as the cricket-mad Governor slips out of the door of the Bank of England, clutching a testimonial gold watch and the latest copy of Wisden, it is worth saying, politely: hold on a minute, sunshine. He is a central banker whose lovingly crafted theories turned out to be hopelessly misguided. Indeed, he was so spectacularly, epoch-definingly wrong that his stewardship of the Bank of England in the wasted years leading up to the crisis of 2008 should be seen as nothing short of calamitous. In that period he was happy to be hailed as the co-author of what Gordon Brown described as “the end of boom and bust” – with its flood of cheap money, low inflation and seemingly strong growth. Sir Mervyn must bear a large share of responsibility for the subsequent disaster.

That culpability stretches back to his time as chief economist and then deputy governor to Eddie George. British economic policy-making then was in a mess, after the farce surrounding the UK’s exit from the Exchange Rate Mechanism on Black Wednesday, in September 1992. To fill the vacuum, Sir Mervyn suggested that the Bank of England’s main concentration should be on controlling inflation, which is a very worthy aim.

But over time it turned into a monomaniacal obsession that meant other enormous risks building up in the UK economy were largely ignored. The Bank and government stood by as a £1.4 trillion mountain of personal debt was accumulated. The narrow measure of inflation also overlooked the dizzying rise in house prices. This was spotted by some at the time. As early as 2002, the City sage Christopher Fildes was worried. There was a classic, massive asset bubble being blown up and it was daft for the Bank of England to choose to disregard the property boom, he said. “Anyone who can leave the cost of housing out of the cost of living must have bought himself a tent.”

Simultaneously, Britain’s banking system was expanding at a phenomenal rate, which meant that if the banks ever got into serious trouble, they might cause the economy to blow up. At the turn of the century the major banks had balance sheets, meaning their total assets, totalling £1.4 trillion. That was a figure equivalent to 143 per cent of GDP. Ten years later, those balance sheets had ballooned to £6.2 trillion – an extraordinary 450 per cent of GDP. Even now it remains close to 400 per cent.

The Bank of England was meant to be on the lookout for such dangers. In the New Labour shake-up of City regulation, it had supposedly been left with responsibility for monitoring the stability of the financial system. But under the inflation-obsessed Sir Mervyn, the other aspects of the Bank’s responsibilities were woefully neglected for years.

Since the financial crisis and recession, Sir Mervyn has attempted to restore his reputation by printing vast sums of money, keeping interest rates at a historic low and piling pressure on the banks to aggressively rebuild capital (meaning they can lend less, which knocks recovery). Yesterday, he even said he was disappointed that governments globally had not taken better advantage of the enormous favours done for them by central bankers such as him.

That really is rich. As we struggle to deal with the long unwinding of the crazy boom – of which he was a leading architect – he blames others and expects thanks for helping to load debt on to future generations. But then you realise, listening to Sir Mervyn, that perhaps he has more in common with Mr Brown than he realises. Nothing was ever their fault. It was always someone else who was to blame.

Of course, it may be that “Merv the Swerve” is getting an easy time of it as he readies himself for retirement because, by all accounts, he is a very nice man. But the captain of the Titanic was also reputed to be a very nice man, and he still allowed his ship to be rammed at high speed into an iceberg.

I do not mean for moment to suggest that the dreadful crash involving the UK economy was solely Sir Mervyn’s fault. But he was up there on the bridge throughout, while Gordon Brown strode up and down the decks assuring the passengers that all was well.

 

 

Edited by zugzwang

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1 hour ago, zugzwang said:

Revisionist claptrap. Mervo the Clown was all too happy to be bracketed with Brown as co-author of 'no more boom and bust' during the good years. Afterwards, of course, as he attempted to slow the runaway train with a bedsheet, it was all Broon's fault.

Mervo wasn't there, he wasn't told, he was ironing his cricket box etc. :rolleyes:

http://www.telegraph.co.uk/finance/bank-of-england/10141232/Nice-Sir-Mervyn-King-still-allowed-the-ship-to-crash.html

 

Isn't the difference between your position and PMD that he says King was constrained by the govt, in particular by Brown, whereas you're saying he was a willing accomplice, an the fact he accepted the position makes him guilty? 

True enough someone else would have done it if not him, but that doesn't make what he's done right.

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