As I was doing the washing up this evening I was listening to Mervyn King, the governor of the Bank of England, giving a speech. The first thing I thought was “Wow! That’s good listening practice for my students!” He speaks perfectly! His speech is carefully prepared beforehand so he speaks in well formed sentences. His pronunciation is crystal clear and he speaks slowly in measured tones. And if you are a student of International Finance (like mine!) then the content is spot on too.
As I listened a bit more the second thing I thought was “Blimey, Mervyn, tell it how it is.” It’s great listening practice but it might make you feel a bit depressed: “Time is running out!” Watch and listen to an extract of Mervyn King’s speech on the Sky News website here and here’s the text to go with it:
There is a long journey ahead before the world economy returns to a sustainable equilibrium, involving rebalancing and a reduction of debt burdens. For the time being, a significant degree of policy stimulus is appropriate to support demand. But that will delay and exacerbate the size of the adjustment ultimately required. It is hard to imagine a solution that does not involve actions in more than one country. In 2008-09, it was easy to coordinate international action in the G20 economies. In the face of a collapse in world trade even
faster than that in the 1930s, countries needed no persuasion of the necessity of policy stimulus. But it has proved much harder to form a consensus on how to tackle the underlying problems. So, three years later, the imbalances in demand remain. Around the world, short-run stimulus packages of various kinds, and unsustainably low interest rates, have bought time. So far that time has not been used to deal with the underlying imbalances, or the weaknesses in bank and sovereign balance sheets. Four years after the financial crisis began, the foreign exchange reserve holdings of China are substantially larger than at the onset of the crisis. Markets now realise that before the crisis banks were seriously undercapitalised and so react in a volatile way to any news about the health of the banking system. And the indebtedness of governments around the world is certainly greater. Time is running out.
If you are keen on speeches from the Bank of England you can access a whole load here (but I wonder how many people will follow that link!)