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Mervyn King Quote: ?Banking? and ?Crises? are natural bedfellows

By Anonymous

A quick quote from Bank of England's Mervyn King: ?Banking: From Bagehot to Basel, and Back Again?

The words ?banking? and ?crises? are natural bedfellows. If love and marriage go together like a horse and carriage, then banking and crisis go together like Oxford and the Isis, intertwined for as long as anyone can remember.

From the press release:

[T]he Governor of the Bank of England, Mervyn King, outlines the challenges of managing the financial system and suggests a framework for assessing proposals designed to reduce the riskiness inherent in banking and solve the ?Too Important to Fail? problem.

He discusses several options including the imposition of a permanent tax on banks, higher capital requirements and limits on leverage.

?Change is, I believe, inevitable. The question is only whether we can think our way through to a better outcome before the next generation is damaged by a future and bigger crisis. This crisis has already left a legacy of debt to the next generation. We must not leave them the legacy of a fragile banking system too.?

Full post as published by Calculated Risk on October 26, 2010 (boomark / email).