Mervyn King is leaving the Bank of England in a couple of months, and he’s got nothing to lose. So he’s spitting in George Osborne’s eye, blaming RBS for bollocking up the British economy and calling for a Solomonic solution to the problem.
A randy King told a parliamentary commission that hiving off RBS’ bad assets would hasten its exit from majority-public ownership and get it back to doing what a bank should do more quickly.
“Simply putting the problem off and postponing it will delay the time we could have a healthy RBS back lending to the real economy again,” Mr. King said.
He also called bullshit on many, many things said by Chancellor Osborne, re: RBS.
The BOE governor called it “a nonsense” that the government is officially managing its stake in RBS at arms length through a body called UK Financial Investments Ltd., and instead urged ministers to use the lender as a vehicle to fuel the economy with loans to businesses and consumers.
“It’s 4½ years on and there is no immediate sign of [RBS] going back to the private sector. That means we have not been sufficiently decisive in either recapitalizing the bank or restructuring it,” Mr. King told the commission. He said splitting RBS shouldn’t take more than a year….
“The problems of RBS have had macroeconomic consequences,” Mr. King said.