King defends bank's record

Bank of England Governor Mervyn King said in a newspaper interview published on Thursday that the bank acted responsibly during the financial crisis and defended its record as an inflation fighting institution. He rejected calls by some politicians for an inquiry into the Bank's conduct during the crisis, saying the financial malaise was a problem of solvency and not one quickly resolved by additional liquidity. Calls for an inquiry centre around the Bank's initial resistance to pump money into the banking system as the Northern Rock crisis ensued in 2007."If you think there has to be a case for an inquiry, it has to be an inquiry into everything, not just the Bank of England but what ministers did, what Treasury officials did, what bankers did and what everyone else was recommending was the right policy before 2007," King said in an interview with the Times newspaper. "I have no objection to that but it can't be the Bank that inquiries into itself." He defended the inflation-targeting regime of the UK and the decision of the bank's Monetary Policy Committee not to hike rates to bring down high headline inflation in recent years. "One of the objectives of inflation-targeting was to embed a regime in which people's inflation expectations were broadly consistent with the target and I think we've managed to achieve that," he said. King would not disclose his preferred successor when he steps down next summer, but said he is ready to meet with Chancellor George Osborne and Prime Minister David Cameron over the issue. "It would be wrong for me to comment on any individuals. If they feel it is appropriate, I will have a private conversation with the Chancellor and the Prime Minister," he said.