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King: Another Financial Crisis is Looming

March 5, 2011

This announcement begs the question, can we sustain another financial crisis? If England goes into another tailspin, can the U.S. be far behind? Plus, I am not hearing a word of this in the major media here. John Harris’s summer of rage, here we come: Brick yourself in and stock your pantry.

Australian Herald Sun reports: THE governor of the Bank of England has warned of another banking crisis unless important reforms take place in the financial sector.

In an interview with British newspaper “The Daily Telegraph”, Mervyn King said that the problem of banks being “too big to fail” had “not been solved” and that imbalances in the banks “are beginning to grow again.”

“The concept of being too important to fail should have no place in a market economy,” he said.

A government commissioned report on whether or not Britain’s biggest banks should be broken up will be published by Sir John Vickers later this year.

The Bank of England, which decides monetary policy such as the interest rate, will also assume the role of the banking regulator once the Financial Services Authority is abolished in 2012.

King said that banks had lost the morals of other more traditional industries that “care deeply about their workforce, about their customers and, above all, are proud of their products. [With the banks] there isn’t that sense of longer term relationships.

“If it’s possible [for financial services firms] to make money out of gullible or unsuspecting customers, particularly institutional customers, they think that is perfectly acceptable.”

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