Former BoE governor: Another financial crash is 'certain'

Mervyn King thinks the world economy will soon face another economic crash. Credit: Oli Scarff / PA Archive/PA Images

Former Bank of England Governor Mervyn King has warned that another global financial crisis is "certain" and will come "sooner rather than later",

Lord King, who headed the bank between 2003 and 2013, believes the world economy will soon face another crash because regulators have failed to learn lessons from the last economic crisis and reform banking.

He said without understanding what caused the crash, politicians and bankers would be unable to prevent another, and lays the blame at the door of a broken financial system.

He has also claimed that the 2008 crisis was not primarily the fault of individual greedy bankers, in his new book, 'The End Of Alchemy: Money, Banking And The Future Of The Global Economy', serialised in The Telegraph.

Without reform of the financial system, another crisis is certain, and the failure ... to tackle the disequilibrium in the world economy makes it likely that it will come sooner rather than later. The (2008) crisis was a failure of a system, and the ideas that underpinned it, not of individual policymakers or bankers, incompetent and greedy though some of them undoubtedly were. Only a fundamental rethink of how we, as a society, organise our system of money and banking will prevent a repetition of the crisis that we experienced in 2008.

Mervyn King

To solve the problem of disequilibrium, Lord King suggests raising productivity and boldly reforming the banking system.