Bankers ‘have not learned lessons from 2008’ – Mervyn King
Lord Mervyn King told the Daily Telegraph the banking sector needed to be more restrained in how it invested money.
He suggested the crash had been caused by a failure in banking culture, with taxpayers hung out to dry by profit-hungry financiers.
Bankers had been encouraged to take enormous risks with the customers’ money, enrich themselves and then dump the losses on the taxpayer.
Huge pay increases for senior executives had produced a ‘very unattractive culture when clever people started to say to themselves: “I’m smart, I can make money out of people who don’t understand this,”’ he said.
He called for bankers to take out insurance to protect savers from risky investments.
“Car drivers have to take out third-party insurance before they can drive. Banks should do the same. They should have to take enough of their assets to the Bank of England that if things went wrong depositors could be paid off overnight. Then no bank run could ever develop.”