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The King’s speech: where does he stand?

Monday 7 March 2011 – by The Mutterer

Bank of England governor Mervyn King is tough chap to read.

Sometimes he is like a musician playing to two orchestras.

Take his performance last week to the House of Commons Treasury Select Committee:

In virtually the same breath as warning of the dangers of “over-regulation”, the maestro of macroeconomics said he couldn’t understand how the public had let banks off the hook.

“I’m surprised that the degree of public anger has not been greater than it has,” he noted, much like a perplexed trade unionist, as he pointed the finger firmly at bankers for cuts in public spending.

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“The price of this financial crisis is being borne by people who absolutely did not cause it,” he said.

Fast forward to the weekend and, in an interview with the Telegraph newspaper, King is complaining that policymakers are “harking back” too much to the policies of age-old interventionist Milton Keynes.

Then, the man who picked Adam Smith for the face of the £20 note, launches into a scathing attack on banks over their apparent ill treatment of customers and exuberant incentives schemes.

He says it is futile to single out individual bankers. But adds that the current system cannot continue.

“Bankers were given incentives to behave the way they did,” he says. “That’s what needs to change. We must resolve this problem.”

Interesting mood music, Mervyn. But which piece are you going to play?

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