Mervyn King: “He will be the most powerful central banker in the world”
0ne day in early June, Bank of England Governor Mervyn King arrived at No. 11 Downing Street for a meeting with U.K. Chancellor of the Exchequer George Osborne.
As Britain’s first coalition government since World War II wrangled over proposals to cut spending, the session between King and Osborne set in motion an overhaul of U.K. financial regulation that would give the Bank of England more power than it has ever had in its 316-year history, Bloomberg Markets magazine reports in its September 2010 issue.
Osborne told King that the government was pushing ahead with plans to let the central bank both set interest rates and police the country’s banks, insurers and investment firms, according to people with knowledge of the meeting.
The new responsibilities would make King, 62, the point man as Britain struggles to tame inflation and regulate and revive the institutions that created the credit crisis while the Conservative-led government enacts the deepest spending cuts in more than 60 years.
Two years into his second five-year term as head of the Bank of England, King is about to gain more combined power over domestic financial regulation and monetary policy than any other central banker.
Trichet, Bernanke
European Central Bank President Jean-Claude Trichet’s attempts to navigate the 16-nation euro zone out of a sovereign- debt crisis are constrained by the need to defer to domestic regulators on bank oversight. While U.S. Federal Reserve Chairman Ben S. Bernanke gets increased power over non-bank financial firms under the Dodd-Frank law, he will have to coordinate with other agencies that regulate securities firms and the insurance industry.
“It’s a massive expansion of the bank’s responsibilities,” King says. Unlike the Fed or the ECB, the Bank of England will wield power over both interest rates and regulation across the financial industry.
The Financial Services Authority, announced in 1997 to oversee the financial industry, will split in two. Most of its regulatory powers will move to the bank under Hector Sants, the FSA’s current chief executive officer. He’ll become one of King’s deputies and chief executive of a new Prudential Regulatory Authority, which will regulate all deposit-taking institutions, insurers, investment banks and clearing houses. The PRA will operate under a board chaired by King.
‘Most Powerful’
A separate Consumer Protection and Markets Authority will be created to look after customers, regulate exchanges and take over the FSA’s authority to impose penalties for market abuse. The bank’s new powers won’t be official until Parliament passes a law on regulation, which the government says will be before 2012.
“He will be the most powerful central banker in the world,” says John Gieve, who was King’s deputy for financial stability from 2006 to 2009.
Some politicians question whether strengthening the Bank of England’s authority is the way to return the country’s financial system to health. “I worry that simply shunting the FSA into the bank doesn’t fix anything,” says Alistair Darling, who was chancellor from 2007 until May in the previous Labour government. “It’s a lot to ask of one institution.”
The central bank’s handling of the financial crisis under King, a former economics professor, has been criticized.
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new rules have made this man very powerful..more than he already was..he is the “king” so the name fits..
401
He might be a master mason too.
There is a video that shows him & Gordon Brown performing a handshake of which some claim that it is the “real grip of a master mason”.
http://thescum.info/2010/03/08/gordon-brown-bully-and-freemason/
What do you think?
i think its a master mason shake..wtf!