Monday, January 28, 2008

Mervyn King Quotes

  • Jan. 22, 2008: "Northern Rock … is not the epicenter of the present global banking crisis. That lies in the very substantial losses made by many banks … as a result of the collapse of the U.S. sub-prime mortgage market." "After a decade and more of non-inflationary consistently expansionary (nice) economy, a phrase I coined in 2003, we move to a somewhat bumpier but still rather stable path … the not-so-bad period. You might think we have now entered a not-so-good period … a period of above-target inflation and a marked slowing in growth."

  • Nov. 6, 2007: "The role of the Bank of England is not to do what banks ask us to do; it's to do what's in the interest of the country as a whole."
  • Sept. 12, 2007: "The provision of large liquidity facilities penalizes those financial institutions that sat out the dance, encourages herd behavior and increases the intensity of future crises."
  • Aug. 8, 2007: "Interest rates aren't a policy instrument to protect unwise lenders from the consequences of their unwise decisions."
  • June 20, 2007: "Be cautious about how much you lend, especially when you know rather little about the activities of the borrower. It may say champagne - AAA - on the label of an increasing number of structured credit instruments. But by the time investors get to what's left in the bottle, it could taste rather flat."
  • June 20, 2007: "Excessive leverage is the common theme of many financial crises of the past. Are we really so much cleverer than the financiers of the past?"
  • Dec. 1, 1998 : "A successful monetary policy should be boring...successful central bankers should be seen neither as heroes nor villains, but simply as competent referees, allowing the game to flow and staying out of the limelight."
  • Jan. 1, 1997: "An 'inflation nutter' (is) a governor who places weight only on inflation and none at all" on other variables, including economic performance.

-Bank of England Chief Changes Tack in Crisis

Chief Economists' Workshop: Policy Challenges to Monetary Theory

Workshop on New Developments in Monetary Policy in Emerging Economies

Of Nutters and Doves

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