Mervyn King recalls his 'exciting and fascinating' time averting financial crisis
Former Bank of England implied that the economic crash wasn’t all bad
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Your support makes all the difference.It’s not a word many would associate with the 2008 financial crash, but former Bank of England governor Mervyn King has described reacting to the economic crisis as "exciting," adding that he helped prevent another Great Depression.
King asserts that, along with Federal Reserve ex-chair Ben Bernanke, he minimised the potential impact of the crash.
“It was exciting and it was fascinating and it was the sort of problem that we had trained to deal with over many years,” he told Radio 4’s Today programme.
“So I think both Ben and I felt that having spent a good deal of time thinking through the intellectual foundations of what to do with a banking crisis and the opportunity to deal with one was one that we were well prepared for.”
He added that the 2008 collapse of US banking giant Lehman Brothers was easier to handle than the start of the UK banking crisis in 2007.
“And I think that the harder the problem in October 2008… the easier it was to deal with because the solution was more obvious,” he said. “It was trickier back in 2007 when it was actually less obvious.”
King said that the Bank of England employed a “great deal of transparency” throughout the crisis.
“But I think there is a big difference between explaining why you are taking actions and saying what things you think will result from it which are positive in nature from saying we are taking actions to prevent a disaster occurring,” he added.
“Earlier in the programme we were hearing about Greece – Greece did not prevent something terrible happening, Greece has been through a repetition of the Great Depression as far as it’s concerned.”
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