King Says BOE Discussing `Longer-Term' Solution With Banks

Discussion in 'Economics' started by ASusilovic, Mar 26, 2008.

  1. March 26 (Bloomberg) -- Bank of England Governor Mervyn King said the central bank is discussing ``longer-term'' solutions to the credit crisis with U.K. financial institutions.

    King said in testimony to lawmakers that one of the principles underlying any plan of action should require that bank shareholders shoulder the risk of losses. He also said `` a longer-term solution must focus on the overhang of assets and not subsidize issues of new assets.''

    King said the bank will renew a three-month auction from January that expires April 15, with the amount of funds on offer to be determined at the time. He also expects inflation to slow ``towards'' the Bank of England's 2 percent target, ``starting later this year.''

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