Bank of England director: Occupy was right

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Occupy were attacked by police in the UK and the US, but senior economists are now starting to accept their arguments.
Occupy were attacked by police in the UK and the US, but senior economists are now starting to accept their arguments.

The Occupy movement was right to pinpoint inequality as a cause of the financial crisis, a Bank of England director admitted last night.

Director of financial stability Andy Haldane also used his appearance at the movement's 'New Putney Debates' series of talks to suggest banks were exaggerating their threats to leave the UK if a financial transaction tax was introduced.

"Occupy has been successful in its efforts to popularise the problems of the global financial system for one very simple reason: they are right," he said.

"By this I do not just mean right in a moral sense. It is the analytical, every bit as much as the moral, ground that Occupy has taken.


"For the hard-headed facts suggest that, at the heart of the global financial crisis, were and are problems of deep and rising inequality."

Haldane also said there was "no great ideological chasm" over a financial transactions tax – dubbed a Robin Hood tax by some - and that policymakers had "overblown" the risk of banks moving to other countries.

"Lots of countries now have seen the perils of having big banks on their doorstep, especially when they blow up," he added.

Haldane's role as a regulator means little will come from his assessment of the causes of the financial crisis, but his admission marks a potentially significant moment in the financial establishment's assessment of the crisis.

Several left-wing economists, such as former World Bank boss Joseph Stiglitz, have cited rising inequality as a cause of the financial crisis.

Under this assessment, the crisis hit due to a housing bubble caused by low and middle earners relying on credit, leveraged on their mortgage, to maintain their spending power following 30 years of stagnant wages.

Ed Miliband is understood to share that analysis, but the comments from Haldane suggest it is gaining currency in the Bank of England as well.
 

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