Economic reality is finally leaking out... albeit in code

[Paul Mobbs]

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

Speech by Mervyn King lays out reality of a lower growth/lower income world 
- -- albeit in economist-speak coded form...

"I am not sure that advanced economies in general will find it easy to get 
out of their current predicament without creditors acknowledging further 
likely losses, a significant writing down of asset values and 
recapitalisation of their financial systems,"

The most significant asset values in the UK are not stocks and shares, its 
house/land prices, and within that lies the "further likely losses" clause 
of the statement.

If only someone would say this in plain English! Pesto almost makes it in 
his comment article for the Beeb, although not many would struggle through 
that -- http://www.bbc.co.uk/news/business-20047863


P.



http://www.bbc.co.uk/news/business-20051656

King says banks must raise their capital levels

BBC News, 23rd October 2012


The UK and other major economies will remain weak until banks have sufficient 
capital to absorb "likely" future losses from bad loans, the governor of 
the Bank of England has warned.

Sir Mervyn King said this was because the banks' current "insufficient 
capital" was continuing to deter them from lending to households and firms.

He added that banks needed to accept that further bad debts were expected.

Sir Mervyn said only such a change could allow economies to prosper again.

"I am not sure that advanced economies in general will find it easy to get 
out of their current predicament without creditors acknowledging further 
likely losses, a significant writing down of asset values and 
recapitalisation of their financial systems," he said.

"Only then will it be possible to return to a more normal provision of 
vital banking services so crucial to an economic recovery".


'Encouraging signs'

Speaking at an event in Cardiff, Sir Mervyn said the government and Bank of 
England's latest effort to boost bank lending - the Funding for Lending 
scheme - must be used as a "window of opportunity" to "restore the capital 
position of the UK banking system".

Yet he said the initiative could only be "temporary".

Under the Funding for Lending scheme, commercial banks can borrow up to 
£60bn from the Bank of England at a low rate of interest.

Turning his attention to the wider economy, and with the latest UK economic 
growth figures out on Thursday, Sir Mervyn said the economy was "barely 
higher than two years ago".

Yet he added that there were "encouraging signs", particularly in the jobs 
market.

He added that the Bank of England would "think long and hard" before it 
decides to increase its programme of quantitative easing (QE) from the 
current level of £375bn.

Under QE the Bank pumps fresh money into the banking system to try to boost 
lending.


- -- 

.

"We are not for names, nor men, nor titles of Government,
nor are we for this party nor against the other but we are
for justice and mercy and truth and peace and true freedom,
that these may be exalted in our nation, and that goodness,
righteousness, meekness, temperance, peace and unity with
God, and with one another, that these things may abound."
(Edward Burrough, 1659 - from 'Quaker Faith and Practice')

Paul's book, "Energy Beyond Oil", is out now!
For details see http://www.fraw.org.uk/mei/ebo/

Read my 'essay' weblog, "Ecolonomics", at:
http://www.fraw.org.uk/mei/ecolonomics/

Paul Mobbs, Mobbs' Environmental Investigations
3 Grosvenor Road, Banbury OX16 5HN, England
tel./fax (+44/0)1295 261864
email - mobbsey at gn.apc.org
website - http://www.fraw.org.uk/mei/index.shtml
public key - http://www.fraw.org.uk/mei/mobbsey-2011.asc

-----BEGIN PGP SIGNATURE-----
Version: GnuPG v2.0.16 (GNU/Linux)
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=qC3e
-----END PGP SIGNATURE-----