THE ECONOMIC impact of the global financial crisis has been as devastating as a world war, a senior Bank of England official warned today.
• Senior official Andy Haldane said that in terms of the loss of incomes and outputs, the crisis is “as bad as a world war”
• Haldane says the crisis will most likely still be being paid for by our grandchildren
• He said that more could and should be done to get lending moving
Andy Haldane, the Bank’s executive director for financial stability, said that public anger at the banks was fully justified.
“In terms of the loss of incomes and outputs, this is as bad as a world war. That is the scale we are talking about,” he said in a radio interview.
“If we are fortunate, the cost of the crisis will be paid for by our children. More likely it will still be being paid for by our grandchildren.
“There is every reason why the general public ought to be deeply upset by what has happened - and angry.”
Mr Haldane said the banks still needed to own up to risky assets on their books if confidence was to be restored to the system and lending to business was to flow again. Failure to come clean would mean “the fog will persist”.
“Investors will be much less willing to put their money into the banking system. They will lack confidence in the banking system and will either charge very high rates for lending that money to banks or will just withdraw their money entirely,” he said.
“More could and should be done to get lending moving as a springboard to getting the economy moving.”