Bankers who re-package - or securitise - their loans and sell them on, not only contributed to the global economic crisis. They also disrupted the European Central Bank’s radar systems.
The ECB prides itself in its “monetary analysis” – the study of monetary aggregates and lending data for early signs of inflationary dangers, which is used when setting interest rates. But a new statistical database released by the ECB today shows how loan securitisation has confused the picture. Read more
Sir Mervyn King, as the Bank of England governor is now known, is a busy man. He runs the UK central bank and, insiders say, delegation is not his strongest characteristic.
In the reforms to the UK economic policy framework following the financial and economic crisis, the government will make Sir Mervyn busier still. On top of his duties as chief executive of the Bank, chairman of the Monetary Policy Committee and guardian of system-wide financial stability, he is geeting more duties to perform.
He now chairs the Financial Policy Committee, a body whose remit remains unclear but appears to add teeth to the financial stability role. He will also chair the board of the Prudential Regulatory Authority, the bank supervisory arm which will come to the Bank from the Financial Services Authority. It is no wonder that parliamentarians are concerned about accountability at the Bank. Read more