Lord Mervyn King, the former Bank of England boss, has warned that another financial crisis is certain and will probably come "sooner rather than later".
The former governor of the UK central bank during the last financial crisis Mervyn King, who stood down in 2013, said reform of monetary and banking systems may help prevent the crisis, reports the BBC.
But he added that failure “to tackle the disequilibrium in the world economy makes it likely that it [a crisis] will come sooner rather than later”.
King, 67, who headed the bank between 2003 and 2013 wrote in his book The End Of Alchemy: Money, Banking And The Future Of The Global Economy, that the 2008 crisis was the fault of the financial system, not individual bankers.
“The crisis was a failure of a system, and the ideas that underpinned it, not of individual policymakers or bankers, incompetent and greedy though some of them undoubtedly were,” he wrote.
To tackle the disequilibrium in the world economy, he suggests raising productivity as well as reforming the banking system.
“Only a fundamental rethink of how we, as a society, organise our system of money and banking will prevent a repetition of the crisis that we experienced in 2008,” he said.
He added that global central banks are trapped in a “prisoner’s dilemma”, whereby they are unable to raise interest rates in case they derail economic recovery.
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
