In a hard-hitting speech in Edinburgh last night, Bank of England Governor Mervyn King declared that regulation alone will be insufficient to stabilise the UK’s financial system – the way that banks themselves are structured will have to change, too. Judging by the fact that those very banks are preparing to pay out bumper bonuses of £6bn, while the rest of the country still languishes in recession, he may have a point.
Abandoning the tradition that central bankers should be measured and uncontroversial in public, King nailed his colours to the mast, making his clearest call yet for banks to be broken up. ‘To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with so little sign of reform’ he declared.