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Written by rosalind renshaw

The banking world has reacted furiously to Bank governor Mervyn King’s remarks that the sector is in need of urgent reform with a second banking crisis on the cards.

King had claimed that the financial services sector routinely rips off millions of customers.

He also criticised its short-termist outlook, hit out at the bonus culture and warned that imbalances in the banking sector were growing again.

But the industry said this was an insult, with some saying that King was unfit to remain in his office.

One senior figure said he was “an embittered old man with no appreciation of reality”.

In his interview, King also admitted that he had not done enough to avert the banking crisis and wished he “had spoken out more forcefully against the build-up of leverage”.

But a former MPC member said King had been ‘too kind’ to himself: “If you look at the historical record, he completely missed most of the problems and even in August of 2007 was still saying that securitisation was a good thing.

“Frankly, he is trying to rewrite history.”


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