For some reason, this week’s Mervyn King speech at the Economic Club of NY remains unpublished by the Bank of England. They apparently are not as transparent as the US Central Bank, who seems to publish every Fed Governor Speech the moment they begin to speak.

While we appreciate Sir Mervyn King’s eloquence and arguments, we are perplexed by the lack of pu8blication of what was to all other indications a public speech made to a room of journalists and market participants.

Well, that is not how we roll here in the colonies. As a a public service, and a continuation of the 236 year struggle to free ourselves from some of the odder rulings of British Society, we present to you Sir King’s complete and unedited speech in text form so it is Google searchable.

Sure, we have a special relationship with England, but major policy speeches given here by elected or appointed government officials are usually considered public domain works. (Note that the The Economic Club of New York finally posted a PDF of the speech here).

 

Category: Bailouts, Credit, Federal Reserve

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Must Read: Mervyn King’s “Unpublished” Speech”

  1. gkm says:

    Publish in the public domain, unless it’s a Treasury Secretary speaking to a bunch of hedge funds, then it’s de rigueur.

    Don’t publish a speech because you’re trying to profit from markets or publish a speech because you’re trying to profit from markets. Is there a difference? Obviously, if you are trying to manipulate markets, publishing a speech is essential, but it’s not exactly the quintessential element of virtuous democracy. It’s a different strategy, but not necessarily a different game.

  2. algernon32 says:

    I read it as:

    We are shoving a large portion of our GDP at our large banks in hope that they will start lending into the real economy again someday. Soon, were sure, maybe in 2013.
    We would like to reinflate the housing bubble, but the ongoing deleveraging is swamping our reflation efforts.

    The tidbit of ~25% of GDP being shoveled at the banks to keep them afloat got S&P off the fence for the downgrade?

  3. Peter Davies says:

    Touchie, touchie BR. Just because others do something differently, doesn’t necessarily mean they are being dismissive. Interesting to note that the post-colonial hang-up is still alive and well after 236 years.

  4. 873450 says:

    99% suffering was not blamed on failed austerity policy. Instead, rising energy/commodity prices were cited as causative factors suppressing recovery and the possibility of additional price increases were dismissed.

    Interesting:

    “The second action that the bank has taken to provide a breathing space before these broad macroeconomic factors feed through is to introduce what we called a funding-for-lending scheme, a special scheme started on the first of August under which the Bank of England with a guarantee of the government, because this is a quasi-fiscal action, would provide four-year finance to our banks to enable them to increase lending to the real economy, or at the very least to contract lending to the real economy by less than they would otherwise have done. We will lend to banks according to how much they are expanding their own net lending to the real economy. And the more they expand their net lending, the lower the interest rate which we will charge on loans to them. There’s a very powerful financial incentive built into this funding-for- lending scheme to persuade banks to expand their lending.”

    Why didn’t Paulson consider this instead of unconditional bailouts?

  5. zdd200 says:

    My 5 salient takeaways:

    1. FLS. Seems like a no-brainer. Why isn’t the Fed doing something like this?
    2. Popular perception of a nation’s health is vastly more important than I ever imagined. Adding to one’s sovereign debt can be relatively cheap or expensive, depending on the health value attributed to a given country by global investors. This might sound idealistic, but it seems like we’d all benefit from some more…
    3…mutual trust and good faith. Global central banks already exhibit some of this. If countries had access to cheap loans the global economy would enjoy quicker recoveries, especially the EU. Relative to the rest of the world, the US is in an enviable position because of this: the Treasury borrows by the trillions on the world’s good faith in the Greenback while the Fed effectively steamrolls the country’s financial industry.
    4. Deleveraging and ‘Too-big-to-fail’. The Fed recently announced plans for stricter regulations governing the US arms of large global banks, while the Bank of England is years ahead of the US in deleveraging its large financial institutions. To be fair, England acted more from necessity; their financial behemoth is responsible for 500% of their annual GDP whereas the US’s was under 100%.

    The next step is to continue to delever the US Big Banks: Goldman Sachs, JP Morgan, Morgan Stanley, Citi, Bank of America. AIG can be included here. In my mind, any institution that can be labeled ‘too-big-to-fail’ is too big and should be broken up trust-buster style. At the very least they should be regulated and scrutinized to the bone. They must not be allowed to hold everyone hostage.

    5. Paradox policy. The Fed is applying an ace bandage to our economy when we really need invasive surgery, prompting a major question: will putting off the surgery make our economic conditions worse? Said differently: should we be ripping off the proverbial bandaid so a snot to dig ourselves a deeper hole? The Fed seems to think not. In that case the question becomes: when do we stop? Bernanke provided some clarity by tying the Fed to 6.5% unemployment and/or 2.5% inflation but we all know those are really more like guidelines than rules. It’s going to be difficult to rip the bandaid off after letting our wounds fester for so long, especially if this is indeed the ‘new normal.’

  6. zdd200 says:

    polite reminder: still interested in hearing your opinion. please and thank you