Bank chiefs 'failed to spot crisis'

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Sir John Gieve said the Bank had spotted "some crazy borrowing" and unsustainable asset prices and predicted a correction was on its way.

But he said the Bank "didn't think it was going to be anything like as severe as it turned out to be".

"Why didn't we see that it was so serious? I think that's because we, perhaps, we hadn't kept pace with the extent of globalisation," he told the BBC.

He said the period of growth before this year's crash did not resemble previous boom and bust cycles because it lacked the typical big increases in earnings, consumption and activity.

"We saw the credit, we saw the house prices, but we did see a fairly stable pattern of earnings, prices and output," he said.

Sir John is a member of the Monetary Policy Committee (MPC), whose job it is to set interest rates to keep official inflation rates at 2%.

He also has specific responsibility for financial stability and is a member of the board of the Financial Services Authority.

The Bank of England has slashed rates this year in an attempt to control inflation which was still more than double the 2% target in November.

But inflation is set to plunge below 1% next year as the UK economy slides into recession.