Bank of England former Governor said on Monday banks won’t be responsible for next financial crisis as they have not yet recovered completely to the same that occurred in 2008.
Lord King warned because of the prolonged low interest rates. He said the banking system now seems safer but yet a point is to be made where it is completely safe.
He said it does not make sense to go indefinitely with very low interest rates and there has been little progress in solving different world economies imbalances problem.
However, talking to BBC Radio 4’s Today programme King also safely mentioned that he is not suggesting for any immediate rise in borrowing cost as the action may be too early and it resulted with another downturn.
He also talked about the Lehman Brothers collapse in late 2008 and said financial markets never thought the banks were at risk, but it was surprising to learn that people found the markets not trusting banks anymore.
About the earlier crisis he said it was very complicated and several aspects were attached to it. Even the response of Bank of England as well as of the Federal Reserve was complex too. There were several moving parts and he then felt to be a pilot in a cockpit who was always alert and tried keeping eyes on every light that was turning red.