BoE’s Tucker contradicts King on carving up banks
The deputy governor of the Bank of England Paul Tucker contradicted his boss yesterday when he poured cold water on governor Mervyn King’s idea of splitting up big banks in a bid to ensure financial stability.
Tucker said: “I do not much like the notion of a list of ‘systemically important firms’ because, as a previous generation of policymakers taught us, what proves to be systemic depends so very heavily on the circumstance.”
Tucker joins Prime Minister Gordon Brown, chancellor Alistair Darling and the Financial Services Authority who have all come out against King’s support for the idea of carving up retail banks from more risky activities like proprietary trading.
Tucker also said anaemic UK growth could see inflation undershooting the two per cent target and that the outlook remains uncertain.