King: talk of euro’s fall is doomsaying

BANK of England governor Mervyn King has compared those who forecast the break-up of the euro to unhinged doomsayers.

Asked about the possibility of the end of the single currency, he said: “I remember as a student going to the centre of London and seeing on the main shopping street a man wearing a sandwich board and across it was written, ‘The end of the world is nigh’, and the interesting thing was he was still there 20 years later.”

Speaking in his role as vice-chair of the European Systemic Risk Board (ESRB), he also claimed that “there was no discussion of that at the ESRB,” when asked about plans for a country leaving the Eurozone.

Instead, King called for “swift and coordinated” moves to put into action the statements from recent summits.

King also used the pre-Christmas press conference yesterday to suggest the pan-European body of regulators could intervene to enable the UK to implement its overhaul of the FSA.

He said: “The ESRB is examining relevant legislative initiative in the EU with a view to providing macro prudential perspectives on the establishment of the new regulatory framework.”

In other words, King implied that the ESRB could go up against the European Commission in supporting moves to establish new national “macro-prudential” regulators, which has been a bone of contention between the UK and EC.