Bank of England governor admits slow crisis reaction

LONDON - The Associated Press

Mervyn King. REUTERS photo

The governor of the Bank of England says it was slow in comprehending the fragility of the banking system before the global credit crisis hit.

However, in an interview on BBC radio yesterday, Mervyn King said the crisis was not the failure of any one institution, but rather represented the failure of a system as a whole.

He said he accepted the bank’s share of responsibility for “going along with a system that failed.” King spoke the morning after giving a speech in which he said the Bank of England should have “shouted from the rooftops” that banks had been allowed to borrow and lend too much.

He said in the speech that there had been a “failure of imagination” to understand that big banks such as Royal Bank of Scotland might need to be bailed out.