Just as Mervyn King, as Isabel flags in her blog, is being dragged into the Libor scandal, comes a truly remarkable article from the FT headlined ‘The bank that roared’.
This bank, in case you are wondering, refers to the Bank of England. The FT says the central bank – led by the good ol’ Governor – is ‘back in charge’ and showing that ‘it means business’. The Old Lady of Threadneedle Street, which in past years had been taking a more ‘laissez-faire’ approach to bank funding and lending, is firmly in the saddle once again. The BoE has a ‘new attitude’ and is now ‘more muscular’. By way of illustrating this, the FT describes how Mervyn on 2 July called in Barclays chairman Marcus Agius and ‘handed him the regulatory equivalent of a loaded revolver’. It was clear, says the article, that Bob Diamond ‘was the intended victim’.
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