Bank governor speaks to Scottish businesses

Mervyn King believes that the UK will face ’two fundamental long-run challenges’ as the economic recovery begins to take shape.

Speaking to Scottish business organisations in Edinburgh on Tuesday (October 20th), the governor of the Bank of England said that rebalancing the economy and reforming the banking sector are the two issues that should receive the most attention over the coming months.

Mr King stated that more resources should be allocated to stimulating business investment and net exports, as well as removing the fiscal deficit and boosting national saving rates.

He also claimed that ’both the structure and regulation’ of banking must be reformed to avoid a repeat of the events that preceded the financial crisis.

’Banks increased both the size and leverage of their balance sheets to levels that threatened stability of the system as a whole. They remain extraordinarily dependent on the public sector,’ he commented.

Meanwhile, minutes from the latest Monetary Policy Committee meeting have revealed that the Bank of England’s policymakers voted unanimously to hold interest rates at 0.5 per cent earlier this month.
ADNFCR-2318-ID-19419245-ADNFCR