Last night Sir Mervyn King gave the 2012 BBC Today Programme Lecture on current issues facing the global economy. The speech gave an interesting insight into the relative importance of RRP with respect to the Bank’s future plans.
Sir Mervyn detailed the priorities for the Bank of England in making the banking system safer, dubbed the “three R’s”:
- Regulation: forcing banks to be better capitalised
- Resolution: making sure that badly run banks can fail safely
- Restructuring: implementing the findings of the ICB
Unfortunately, there was bad news for anyone hoping that banking would become an easier environment in which to operate in future. Next year, responsibility for regulating banks in the UK returns to the Bank of England and Sir Mervyn sees an important aspect of the Bank’s job as being “to take away the punchbowl just as the next party is getting going”. Moreover, he fully accepts that his pre-emptive strikes on the punchbowl will affect the man on the street as well as bankers. Does that make him a partypooper? Probably not. More like a parent with a genuine right to be concerned. Let’s just hope that, in requiring us all to be abstemious, the Bank recognises that everyone stands to benefit from a good party.
Read the full speech at: