Monday, July 11, 2016

AFTER BREXIT - Global Financial System

"Brexit or no, former central banker says global financial system needs fixes" PBS NewsHour 7/7/2016


SUMMARY:  The pound and European markets took big hits when the United Kingdom voted to leave the EU.  Economics correspondent Paul Solman talks to Mervyn King, the former head of the Bank of England and the author of “The End of Alchemy,” who offers a longer view -- and a less alarmed one -- about what Brexit means for global banking and financial stability.

PAUL SOLMAN (NewsHour):  Mervyn King, former head of the Bank of England.

In his new book, “The End of Alchemy,” King still worries that the world banking system hasn't reformed itself, eight years after its excesses led to collapse.

MERVYN KING, Former Governor, Bank of England:  Thames, the old man river of Britain, been here forever, rather like money and banking.  We have always had them.

PAUL SOLMAN:  As it happens, he was giving me a tour of London to make his case on the day of the Brexit vote.  The oddsmakers, the markets, and I at least thought Britain would remain in the E.U.  As we passed a group of upbeat remainers, I thought, no problem.

WOMAN:  Counting is under way of tens of millions of votes.

PAUL SOLMAN:  Then came the result.

MAN:  And the answer is, we're out.


PAUL SOLMAN:  So, before asking you to take the tour, we checked back with King to see if the vote had altered his analysis.

MERVYN KING:  We didn't talk much about the Brexit vote, because actually the Brexit vote isn't germane to the fundamental challenges dealing with our banking system and putting it on a sound footing.  We were talking as we walked around London about the really important long-run issues affecting our economies.

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