Sir Mervyn King: Public are right to be angry at banks

Sir Mervyn King Sir Mervyn King is stepping down at the end of June

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People have "every right to be angry" with banks for the UK's financial crisis, the outgoing Bank of England (BoE) governor Sir Mervyn King says.

In one of his last interviews before stepping down, for BBC Radio 4's Desert Island Discs, he expressed sympathy with public frustration as slow growth takes its toll on living standards.

But the governor also cautioned that blaming individuals was a distraction.

Sir Mervyn said there were signs economic recovery was under way.

Canadian Mark Carney is to become the first foreign BoE governor when he takes over in July.

"In many ways, when the crisis hit in 2007-08 I was surprised that people weren't angry sooner," Sir Mervyn said, speaking to Kirsty Young for the programme.

"You can see it coming through now as the impact on standards of living becomes more obvious and they have every right to be angry.

"But this crisis wasn't caused by a few individuals, it was a crisis of the system of banking we had allowed to grow up.

Sir Mervyn's Desert Island Discs

Bob Dylan

There was a flurry of speculation about his musical tastes on Twitter. Using the hashtag #MervynSongGuesses, users suggested hits included Simply Red's Money's Too Tight to Mention and Abba's Money, Money, Money. His real selections were:

  • Mambo No 5 - Lou Bega
  • Mozart's Symphony No 40
  • Beethoven's 7th Symphony
  • Highway 61 - Bob Dylan
  • Rotterdam 82 - Doug O'Brien
  • I Remember the Wonderful Moment - Boris Gmyrya
  • London Concerto by Huw Watkins, played by London Symphony Orchestra
  • My Ship from Lady in the Dark, performed by Anne-Sofie von Otter

"It's very important we don't demonise the individuals but we do keep cracking on with changing the system."

The 65-year-old also called on the public and media to give politicians "space" instead of demanding "immediate solutions".

He rejected criticism that BoE failed to anticipate the country's financial woe.

"That's complete nonsense because many things happen in the future that no-one can foresee," he said.

"What you pay the Bank of England for is to understand the nature of the system and to respond in the right way - and we did."

Sir Mervyn, who now intends to take a "gap year", said the economic crisis would have some positive legacies.

They include a reformed, "safer" banking system and a different moral view about making money.

"I go to schools and speak to sixth-formers and others. I found before the crisis that a disturbingly high proportion of them, instead of wanting to become engineers or scientists or musicians, wanted to go and work in the city," he said.

"Why? Because they wanted to make a lot of money. Now I think they don't really want to go and earn money if it is being earned in a way that creates enormous damage to the rest of society. I think that's a very healthy thing."

Sir Mervyn advised his successor Mr Carney simply to "be himself," adding: "He's an outstanding person but the important thing is that he does it in his own way."

Referring to his own time at the BoE, which began with a role as non-executive director in 1990, Sir Mervyn indicated he would allow others to rate his performance.

"I don't want to join the chorus of people who write books with the subtitle: Why I was right and everyone else was wrong," he said.

"The historians will make their judgements in 20 years' time."

Listen to Desert Island Discs on BBC Radio 4 at 11:45 BST on Sunday June 2 and 09:00 BST on Friday June 7, or afterwards on the BBC iPlayer.

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