Review of Mervyn King's The End of Alchemy: Money, Banking and the Future of the Global Economy

At odds with leading UK newspapers and with a wide ranging host of eminent people including Niall Ferguson, Larry Summers, Paul Volcker, Henry Kissinger, Alan Greenspan and Michael Lewis, this reviewer begs to disagree, not simply with the arguments, but with the whole premise of the book. This is not to say that the book is uninteresting; quite the contrary, I agree with Professor Summers that the book deserves to be widely read, but perhaps not quite for the reasons he had in mind. Indeed, it contains much of interest to a general readership which is written by an insider and is nothing if not revealing. However, in agreement with the current Chief Economist of the Bank of England, Andy Haldane, and the Global Chief Economist of Citigroup, Willem Buiter, I believe that the best path to global financial stability is a sharpening (through regulatory simplification and specificity) of the classical aims of central banks to maintain price and financial stability through direct control of interest rates and close monitoring of banking capital ratios and credit expansion in interaction with the financial markets. Arguably this was not the case during the tenure of Mervyn King as Governor of the Bank.