Mervyn King, the Governor of the Bank of England is singing a classic Perry Como tune It’s Impossible.
It’s impossible, tell the sun to leave the sky, it’s just impossible
It’s impossible, ask a baby not to cry, it’s just impossible
Can the ocean keep from rushin’ to the shore? It’s just impossible
If I had you, could I ever want for more? It’s just impossible
For to live without your love–It’s just impossible
Please sing along with Perry Como while reading Mervyn King: ‘Impossible to say’ how much capital needed to shore up banking system.
Mervyn King, the Governor of the Bank of England, has said it is “impossible to say” how much capital will be required to shore up the British banking system.
Mr King said it would take “many months” to establish the scale of toxic assets held by banks, and the scale of problems would change depending on the international economic outlook.
“That is not something that is easy to do or can be done quickly,” he told the MPs. “It will require a much longer and more detailed assessment contract by contract.”
“How much capital banks will need in the end is impossible to tell,” he added.
But he also suggested public borrowing was too high as the UK entered the crisis and that had affected the Government’s response to it. “I do think public debt matters. We get to this crisis with levels of public borrowing which were too high and that made it difficult,” he said.
But, he added, that was a “million miles” away from the idea that Britain in any way resembled somewhere like Zimbabwe.
I happen to agree with King that it is impossible to say precisely how much is needed to shore up banks, not just in the UK, but the Eurozone, US, China, Ireland, and Australia as well.
Meanwhile, back in the US, a different tune is playing. That tune is called “Yes We Can”. My rebuttal is Dear Mr. President, With All Due Respect ….
Looking ahead, Mervyn King thinks it’s impossible, yet Bernanke Rejects ‘Anything Like’ Bank Nationalization before the results of the much ballyhooed “stress test” is even complete. This is like building a bridge without knowing what load the bridge needs to carry. Well maybe the bridge does not collapse, but I would not want to be the first to cross it in a cement truck.
And let’s be honest about this. There is a lot of cement on the balance sheets of banks. How much? It’s impossible to say with any degree of certainty, which is why mistrust of banks is so high, and the plan of Bernanke and Geither is so misguided.
Mike “Mish” Shedlock
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