Wednesday, September 19, 2007

Brown and Darling take charge at Bank of England?

Interesting piece in the Financial Times.
British banks will be able to borrow from the Bank of England for three months using mortgages as collateral, the central bank announced in an extraordinary U-turn.

The humiliating move for Mervyn King, Bank governor was announced on Wednesday morning when the Bank said that next week, it would be willing to swap £10bn of cash for a wider range of commercial bank assets "including mortgage collateral".

Up to now, Mr King has insisted that such action would be tantamount to bailing out banks that had made risky lending decisions and would sow "the seeds of a future financial crisis" because it provides after the event insurance for risky behaviour.
So that's that then? Mervyn King doing the Treasury bidding?


anthonynorth said...

So the Bank of England is only independent when our 'esteemed leader' says so.
Of course, it was obvious it would happen. But don't worry, Gordy will give them back their independence soon. Until ...

Barnacle Bill said...

I think an honourable man would resign in protest at the way in which our money is being used to try to shore up Gay Gordon's reputation.
Quite frankly this is political with a capital P.
It is just so lamentable we have no effective opposition to hold Gay Gordon & Alaitair Dimwit to account.

Anonymous said...

Or is it a smoke and mirrors way to bring private mortgages into government ownership.??

Thereby fulfilling one of Gordon's socialist promises to increase the national housing stock.

Old BE said...

Mervyn is a shrewd man. He should quit and tell us how it really is.

kinglear said...

Dizzy, there is a wider issue here. The BofE is clearly NOT independant. When it sinks in to all the gentlemen who have shifted their money here over the last few years that Merve the Swerve is no longer in charge, the shortage of dosh over the last week or two will be as nothing as to what will happen