‘Tyrant’ King unprepared for financial crisis, says ex-MPC member

Former Bank of England rate setter David Blanchflower has launched a withering attack on Sir Mervyn King’s performance as governor and his handling of the financial crisis.

In a New Statesman article, Professor Blanchflower, a member of the Bank’s monetary policy committee (MPC) from 2006 to 2009, likened King to a “tyrant”.

“A tyrant looks to his own advantage rather than that of his subjects and uses extreme and cruel tactics – which pretty much sums up how I feel Mervyn King has run the Bank of England,” he said.

Prof Blanchflower claimed that Sir Mervyn was caught unawares by the financial meltdown in 2008.

“In my view, King was unprepared for the crisis and, even as late as the summer of 2008, did not even see it coming,” he said.

“[He] was also unprepared for the bank run on Northern Rock in August 2007, even though there were obvious signs that banks that depended on wholesale money markets were in trouble.”

Sir Mervyn is due to retire next summer and Prof Blanchflower said his successor should not be “tainted by the financial crisis”.

“An outsider, not a Bank insider, is needed,” he added.

Among the favourites to replace King in June 2013 are Adair Turner, chairman of the Financial Services Authority (FSA), and one of the Bank of England’s two current deputy governors, Paul Tucker.

Bank of Canada governor, Mark Carney, was reported by the Financial Times to have been approached as a contender, but a Canadian Bank spokesman has since refuted the claim.

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