PPI Claim News - 26/2/2010
Bank Reclaim: Break up the banks it's a 'fool's paradise' says governor
Mervyn King, the governor for the Bank of England, has claimed that the banks must be scaled down to bolster economic sustainability.
Speaking at the Future of Banking Commission, sponsored by the consumer watchdog Which?, Mr King said unless reforms are implemented the economy would not recover, further highlighting the risk of a double-dip recession.
He referred to the current banking system as a "fool's paradise" and called for firewalls to be created to prevent future bailouts of the banks, which come at a cost to the taxpayer.
"We've been living in a fool's paradise…We've been saying to the people who provide finance to the banking system that their money is completely safe, yet the banks have been taking risky activities," he commented.
Mr King's comments come after two part-nationalised banks reported huge losses for 2009.
The Royal Bank of Scotland's pot declined by £3.6 billion last year, while it emerged today that Lloyds Banking Group's funds dwindled by £6.3 million in 2009, following its merger with, what have some critics have coined the financially-stricken, HBOS.
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