I went to see Melvyn King, ex Governor of the Bank of England, interviewed by Will Hutton last week. It was more interesting than I thought. King spoke very calmly and was able to explain complicated concepts with great simplicity. The book would make a good read.
He said many interesting things.
He finds it odd that we had the biggest financial crisis for generations and yet we haven’t changed any of the things that caused it to happen. Similarly he said it was odd that none of the financial stimuli we’ve tried of the last 8 years have worked and yet we still keep using the same methods.
Asked about banks being too big to fail, he said “Too big to fail and too big to sail and too big to jail”. He explained it was very hard to prosecute banks as they operate complex operations across many countries. Too big to sail - even banking CEOs admitted they were too big to run properly.
“Capitalism has gone rogue. People don't trust it anymore." Will Hutton
“…trust is crucial. You don't bring a poison tester to a restaurant, you have to trust them.” Mervyn King
"The idea that it's fun to make money out of people who are less smart than you is corrosive.” MK on investment bankers
“there's a lack of purpose in business” WH
MK asked what it felt like to be in the middle of the crisis “a 0-0 draw can look very exciting on MOTD if you only show 2 minutes of headlines. Mostly it was boring meetings that dragged on and on”
MK on quarterly reporting “the quarterly thing is madness”
Not an optimistic evening.