Banks 'failed to heed crash warnings'

Would the global economy have taken less of a severe blow if central banks and governments had spotted the potential for a crash in the middle of last year - even before Lehman Brothers went bust?

There were warning voices raised before then, and one of them has since spoken out about what he called the 'group-think' among central banks, which persisted in taking an over-optimistic view.

David Blanchflower is an academic economist who used to be an independent member of the Bank of England's Monetary Policy Committee (MPC), which sets UK interest rates. He's now an economics professor at Dartmouth College in the US.

Mr Blanchflower has had hard words for the Governor of the Bank of England, Mervyn King, who heads the MPC - calling his former boss "old iron fist".

Business Daily's Lesley Curwen asked him why he'd been so outspoken.

First broadcast on Business Daily