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BoE’s King: Financial crisis is far from over
The Governor of the Bank of England has said the financial crisis is “far from over” as he joined fellow central bank chiefs, including Ben Bernanke, to discuss economic policy.
In an event at the London School of Economics attended by central bankers including Mark Carney, Mervyn King (pictured) added the path to economic recovery is unlikely to run smooth, the Telegraph reports.
“Whichever crisis we are talking about, it is far from over,” he said on Monday. “There will surely be many unexpected twists and turns before we can truly say that the crisis is indeed over.”
Bernanke, the chairman of the Federal Reserve, defended the US central bank’s aggressive money printing, and argued that America’s loose monetary policy has been supportive of other nations.
He added the weakness of sterling has helped the UK move towards a “relatively early recovery from the Depression […] in part because of some rebound in exports”, but also highlighted that many of Britain’s gains resulted in losses for its trading partners “which became less internationally competitive – hence, ‘beggar thy neighbor’.”
His comments are a nod towards fears over a ‘global currency war’ if certain countries such as China are able to artificially weaken their currencies, resulting in a ‘race to the bottom’ as nations try to maintain their competitiveness.
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