BoE 'underestimated' financial crisis

In an interview for BBC's Panorama, deputy governor Sir John Gieve, believes central banks need new tools to deal with future crises, as interest rate setting is not up to the job of dealing with the complexities of modern finance. Gieve says the Bank of England's Monetary Policy Committee (MPC) - of which he is a member - knew lending had hit 'crazy' levels and the value of houses and other assets were rising beyond what the economy could sustain. The MPC has relied too heavily on interest rates to control the economy, he says, and new tools need to be developed to prevent a similar fi...