Bank of England Governor looks out for homeowners

Bank of England governor, Mervyn King, has warned that the UK needs to improve its system of financial stability to ensure that innocent people do not lose their homes.

Speaking to members of the British Bankers’ Association, the governor stated that the credit crisis and a period of prolonged turmoil on the financial markets had led to rising inflation and slower economic growth.

Mr King warned that the crisis has yet to run its full course and says he will be using his second term of office, which commences next month, to establish a sounder framework for financial stability in the UK.

Excessive lending and the way in which risk has been monitored by the financial authorities will be high on the governor’s agenda; he also wants to ensure that lenders who are failing can do so in an orderly manner.

In a reference to the liberal lending policies of recent years, Mr King drew the analogy of a party that had become wilder and wilder.

He went on to point out that the consequences of this were not limited to the party-goers and that some innocent bystanders may now lose their homes altogether.

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