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King: Banks in denial over failures

Mar 12 2012 13:10 Reuters

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London - Banks are in denial over their failure to deal with the financial crisis and the need to restructure their existing banking model, the governor of the Bank of England, Mervyn King, said in a newspaper interview on Monday.

King said the country's banks blamed him for not offering more support during the crisis because they could not "face up" to their own failures and the need for a restructured model.

"I think it is because they found it very, very difficult to face up to the failure of their banking model. That model needs to be restructured," he is quoted as saying in the article published in the Times.

"My duty was to Britain's economy as a whole and not just to one part of it," he said.

King criticised the banks for trying to stay outside market discipline, until they were forced to ask for bailouts as the economy began to tailspin.

King said "market discipline can't apply to everyone except banks", which is a contributing factor to the public anger against them which is "very real and wholly understandable".

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