Governor King calls for proactive Bank as QE bloats balance sheet

Julian Harris
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BANK of England governor Sir Mervyn King has said it must continue to “pilot the economy” through tough times, as the Bank’s annual report revealed a £315.5bn balance sheet caused largely by quantitative easing (QE).

Writing in the report, released yesterday, King defended the Bank’s loose monetary policy and new credit boosting policy, named the Extended Collateral Term Repo facility. “Our rapid progress in taking on new responsibilities shows that we are ready for the challenges ahead,” King said, also referring to the Bank’s impending new regulatory powers. “We must play a central role in implementing the reforms that are necessary to prevent such a costly financial crisis from happening again.”

In a bid to boost the economy, the Bank has expanded its QE programme over the last year. From the end of February 2011 to 29 February 2012, the Bank’s balance sheet rose from £229.6bn to £315.5bn.

The report also revealed that King was paid £307,792, slightly down on 2010-11. Deputy governors Charlie Bean and Paul Tucker were paid £260,401 and £263,020 respectively. The data reflects a pay freeze taken by staff at the Bank, though the pair saw their pension pots boosted. The Bank put £1.04m into Bean’s pension and £1.35m into that of Tucker.