bank run blog

The Independent reported today that Mervyn King, the Governor of the Bank of England, echoing US bank regulators recent cries for safe and friendly control over banking institutions, called for;

“radical” thinking about financial regulation and, implicitly, a leading role for the Bank of England, perhaps regaining control over the “prudential” regulation of banks while the Financial Services Authority concentrates on “conduct of business.”

The Independent reported that King said, “It is hard to imagine taking steps either to prevent, or to deal with, the consequences of a financial crisis without the active involvement of the central bank.” Perhaps chastened by a new awareness of the dangers of illiquidity, King speculated, “In the longer term, it seems extremely likely that banks and other ‘near’ banks will be called upon to hold more capital and a greater quantity of liquid assets than hitherto.”

see article;
Independent : Sharp rise in inflation will exceed target, warns King