Mervyn King, Governor of Bank of England speaks re Northern Rock

Below is an edited BBC interview with the Governor of the Bank of England talking about Northern Rock.

Some fascinating comments
– he would have wished to have had a mechanism to be able to transfer out retail accounts
– because of the inadequacies of the deposit protection scheme i.e not 100%, he refused to tell people that their money was safe when the rational thing was to withdraw their money
– the Bank had to intervene because of the number of retail depositors involved and the systemic risk that would have been created
– the photos of queues at a British Bank was the most damaging one to the reputation of the Bank

Link here

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