the take over the bank of england soon will be at the people's bank of china is god knows where i was. expecting c.n.n. you want anything here i think we need a predator to come and obviously hunt the vampires we need. you know on the menu i was going to say it's a real shame that that any badger is not in the water doesn't operate in the water because that would be a good opponent because nothing can kill it to move on because speaking about opponents poker men the nobel prize winning economist is one who has a lot of them ok we've talked about him and steve king economist who has been on this show a number of times getting into it also more recently ben bernanke gave one crewmen a kid bernanke not being enough of an academic in his running of the fed saying he should do more burning he said recruitment was incorrect and fire back when he had the opportunity and program when he had his double down take a look at what's happened to bernanke you say he's been assimilated by the borg he's become he's become more concerned probably unconsciously with defending the institutional safety be

what it's going do is make it less likely you're going to get more out of the bank of england. her dark day, this is a glimmer of light. >> david, do you think this does empower the hawks on the bank of england who would prefer not to do more quantitative easing and is concerning the fragility of the economy overblown? >> well, i don't think concerns about the concerns about the fragility of the economy are overblown. i'm starting to do it. there are several reasons. numb beer one, the fiscal state of great britain is extremely powerless. the economic austerity is far less than it, about a half to less than 7% of gdp a year which is pretty tame and you have an economy which is still hampered by enormous leverage in the household sector and the government sector. so i don't think you can stay it's out of the woods. on the other hand it has a government which appears to be more or less going to stay in awful and we're trying to do something about it. it has a free currency. and it is seen by any potential investor or any fleeing investor from europe as being a safe place to put mo

it came from evening land, it came from banks like the roth childs and the barrons, these big bans of england and the bank of england kind of controlled the credit markets. but banks are the interesting part of the 1837 crisis, because for a long time historians have focused on the end of the -- that was the end of when people were panicked. the bank rush is the end of a long period of people being really nervous.

bank of england is expected to be the subject of an independent review into its crisis management techniquesecasting models. the bank has faced particular criticism after repeated provisions of inflation. >> i personally would like to have done better with my forecasting. i'm glad there's going to be reviews because it's important that we're accountable p. and i don't mean that in lip service way. >> yesterday he spoke more broadly about how central banks including the ecb have acted thought the financial crisis. >> the monetary mechanism i think has been extremely well managed by the european central bank. i don't think there's any serious thought anyone can make there. they built the monetary system, they operated an effective monetary policy, they responded to events quickly. and they've providedly equity as we've seen this year. >> so he thinks -- he's the man investigating the bank of england and he thinks the ecb has done well. so on that basis, have they or not? >> i think what they've done reason pli well, i think they were a hit behind the game if we all remember back in 1997. but i

does the prime minister agree, the bank of england and the banking regulators in the u.k. need to amend their operation, in order to ensure sufficient money and credit available to fuel the private sector led recovery, not just more cheap money for the state. could they not learn from america which is doing this very well, and avoid the problems which europe is plunged into by doing it far worse than we're doing it. >> my friend makes a very important point. when i say active monetary policy, i don't simply mean a central bank that engages in quantities, you need to assure that all the monetary institutions are properly capitalized and properly working. i think around europe, there's a lot of work that needs to be done on that. >> with regard to the prime minister's discussion with the president of pakistan. will he deploy barack obama's offensive courtesy to the president of pakistan, the united states has violated the sovereignty of with deadly effects. and will he say that britain stands shoulder to shoulder with with our commonwealth partner in defying american colonia

this morning we have a news inflation is down, and within 1% of the bank of england's target. falling from 3.5 percent to 3%. it means since the first time since i became chancellor, i have not received the bank of. indeed since 2009 this has happened. this brings welcome relief to families on tight budgets. and theback of england expect inflation to fall further over the next year or so. unemployment has also fallen this month. but it remains too high and we need to do even more to help. the ims welcomed today the government's announcement last week it will use the credibility of the balance sheet to go further for businesses, housing, and infrastructure. the ims identified setbacks from the your row area as the economic process expects and financial stability. in the u.k. we have a flexible exchange rate and independent monetary policy which allows us to ease the lower exchange rate and supported monetary policy. the ims has advise for the bank of england on that today. we have to deal with high budget deficits without the support. it's clear we're now reaching a critical poi

the imf has advice for the bank of england on that day. indebted countries have to deal with high budget deficits without that support. it is clear we are reaching a critical point of the eurozone. they need to stand behind their currency or face up to the prospect of a greece of -- a greece exit. the british government is doing contingency planning for all potential outcomes. is our responsibilities to ensure we prepare for something worse. the imf must also prepare for the consequences if members in europe do not follow its advice. let me ask you to welcome christine lagarde. she will answer your questions afterwards. thank you. >> good morning. thank you very much. i am particularly pleased to be here in london on the day when the inflation number is announced. i did not comfort that purpose. i came for the conclusion of the imf mission. and just to give you a bit of background in terms of what that is, it takes a team of more than seven members on a two week mission. they spend it those days walking to multiple stake holders reject talk

there is something the bank of england can do. system with liquidity to make sure even if banks can't borrow from each other, they can continue to borrow from the central bank. i think that will help with the margin, but the uk economy will be hit hard because of the huge trade links. >> and uk retail sales data shows the sharpest drop since january 2010, driven by a drop in auto fuel sales hit by potentially weather-related drop in clothing sales, as well. not adding to what's happening with sterling. i think we're going to continue to see -- >> we're below 1.57, sterling slipping deeper. 3 1/2 month low, the euro's against the yen too. european stocks today, well, none of that is helping us, that's pushed us down further, ftse down 1.6%, the cac down 1.7%, as well. let's take a look at bonds. if we take a look first at bunds, they were down 1.4%, italy just below 6%, still 5.78%, spain at 6.14%, we're not at twhat we were earlier this week. >>> germany auctioned a zero percent coupon today. patricia joins us from frankfurt with

plans are being discussed and have been for some considerable time between the government, the bank of england and the fsa, and that will continue. >> but bank of england governor mervin king did not give details. britain is not a member of the eurozone. >>> nine countries involved in talks on a free trade deal in the pacific region agreed to speed up their negotiations. chief participants from the united states and the eight other nations wrapped up their latest round of talks on the transpacific partnership on wednesday in texas. >> we have made better than expected progress here this week. we plan to move -- continue moving full steam ahead and hope to take another major step toward conclusion of the agreement at this round in july. >> the chief u.s. negotiator also said the country's reported their individual consultations with japan. canada and mexico about their participation in the tpp talks. they agreed to continue those consultations. but the discussions on tariffs and intellectual property protection are reportedly stalled. it remains unclear whether the negotiations will be conclude

in london, will the bank of england sanction another round of qe? we'll speak to a former adviser at 10:30 cet. and we'll be joined by a former u.s. senator who says the president and congress need to leave town until november. find out why at 11:00 cet. >> we just had some data out of italy this morning. we'll get greek unemployment later. italian march industry output up half a percent on the month, better than the consensus for a 4.2% contraction. february unrevised, so industrial output stronger than expected. but first quarter output still down 2.1% from the previous three months. and we have a second quarter survey from the ecb, eurozone inflation 2.3%. 1.9% in the first quarter. growth numbers probably the most interesting. saying 2012 gdp growth in the second quarter will be contractionary again of minus 0.2%, talking about 1% in 2013 for that quarter. euro-dollar just back a little bit from the three month lows we hit yesterday. spanish government has stepped into rescue the country's fourth biggest lender bankia. the state will take a 45%

and as a result of that but it was one guy with a very large credit line taking on the bank of englandhere you've got hundreds of hedge funds better in on this trade with the buying power in the you know what's called a trillion dollar buying power potentially so that how risky is that one hundred forty billion dollars market capitalization of j.p. morgan stock could this stock go to zero as we saw with lehman brothers i don't know about zero but i think it can go a lot lower j.p. morgan has a lot of problems they've got a lot of legal contingencies litigation against them they've got a lot of other questions about their silver positions they've been sort of immune from scrutiny and from any kind of deep look because there's been so much going on in bank of america and. citi group and now they make one mistake that they have to admit to and hopefully some people will be taking a deep dive my disappointment is that you've got one auditor back there with m.f. global with j.p. morgan with bank of america and they don't seem to be doing their job at all peter have you see francine you ment

united states was suffering with banking panics for the latter part of the 19th century, banking panics in the united kingdom were quite rare periods of the bank of england sort of set the pace in some sense. it was the most important central bank, and it helped establish the practices and the approaches that we still used today. now, i need to talk a little bit because it is less familiar about what a financial panic this. in general a financial panic is sparked by a loss of confidence in an institution. and i think the best way to explain this is to use a familiar example. how many of you have ever seen the movie, it's a wonderful life? was people are watching christmas movies than they used to be a guess. well, one of the problems that jimmy stewart runs into as a banker in a wonderful life is a threatened run on his institution. what is a run? well, in this imagine a situation like jimmy stewart, before there was any deposit insurance, no fdic. imagine you have a bank on the corner, regular commercial bank. the first bank of washington d.c. this bank makes loans to businesses and the like. it finances itself by taking deposits from the public and dep

i think the best approach is to work hand in glove with the bank of england to get that balance right. that's what the government will do. >> i'd like to congratulate the prime minister on his stamina. he has done three summits in two days on two continents. can i reiterate the points made, we have to -- what we need, and it's essential that we have a review of nato's strategy with a full commitment by all its members. >> i'd like to thank my friends. that will be enough summits for some time. the g-20 will soon catch up with us. what he says about nato is right. we need the reviews by all nato countries to go through their budgets to work out what is actually necessary for national defense, but what more we can all do to make sure nato has the capacities for the future. >> we need to spend more -- the nation of cyber terrorism which is posing an ever greater threat, can the prime minister assure us there will be the intense focus on resources given to that very big and growing problem acrossed world? >> well, i can certainly say for the u.k.'s part, one of the things we did in the st

an independent bank of england is able to do more to support the economy, if necessary, or if inflation falls below target. fiscal responsibility and monetary activism i believe is the right macro economic mix for our over indebted economy. but the initial ingredient that the government will deliver and needs to do even more is a radical program, economic performance, to make our economy more come pet siv, including come pesive tax rates, planning reform, deregulation, all of the things that business has rightly asked for and that we are delivering. some things are absolutely essential in the short term. our companies need to invest more so we're cupping corporation tax to the lower level in the g-7. banks need to lend to small and medium size businesses so we're creating the national loan guarantee scheme that would provide 20 billion pounds. builders need to build more so we are scrapping almost 1,000 pages of planning move. and those who want that, need the confidence to get out there and into the housing market so we're backing mortgages for people to get new homes because it's abso

england. i mean, it came from banks, like the rothschilds and the bearings and the banks of england and the bank of england controlled the credit markets for all of that. but banks are an interesting part of the panic of the 1837 crisis, because for a long time, historians have focused on the bank runs at the end of the panic period as the sort of start of the panic. but that actually was the end of when people were panicked. the bank runs are the culmination of a long period of people being really uncertain. and banks as an argument for causation were just as political as arguing that martin van buren was somehow responsible. the whigs argued, and the democrats argued for banks and merchants. so when we think about it as banks being at the center of it, that's the argument that got shaped during the financial crisis. >> in the 2008 crisis, we didn't really have too many runs on banks, per se. the government stepped in largely to rescue a number of financial institutions. i was struck by in 1837 that there was certainly a call for the government to step in. is that a common theme throughout the

so there's been a lot of activity from the bank of england over the last period, quantitative easing. it's immensely important to the british economy. i think it's unlikely that would have been possible if the government at the same time hadn't been kind of dealing with this deficit and debt issue at the same time. >> that's absolutely right. sometimes what people say to us why not just go easy on the public spending decisions. why not go easy on the deficit and the debt. if we did so, you could see any rates go up. and for every 1% on interest rates, basically hits the typical family mortgage by about 1,000 pounds a year. so it would be totally self-defeating which is why i think we need to stick to the plans we set out. tough and difficult though those are. we're going to take a couple of questions from the press, if that's okay. mr. robinson from the bbc. >> thank you very much, deputy prime minister. nick robinson from bbc news. europe is turning its back on austerity. do you fear that britain is beginning to turn its back on austerity? mr. clegg, if growth is a priority, why are

central banks were originally designed a hundred odd years ago when the when the great british bank of england was reformed started over it was given the task that when there were when there were panics in the market at the central bank was to step in and lend the money at high rates of interest against sound assets and yet through the package that was what they were supposed to do and the bank of england for a while done a brilliant job at it one hundred twenty five fifty years ago that's what the senate the central bank was supposed to do that's all they should do if you ask me our central bank was set up with the mandate to make sure we had a sound currency they wandered away from that in spades in fact they've done their best to destroy a sound concept of the past few decades if you want to start over you say ok well have a central bank all you can do is in times of panic you step in you take sound collateral out of the sound collateral from people you think will so you charge them high rates of interest and you get through the panic if people come in with an unsound collateral or people w

as the governor 69 bank of england said yesterday, the biggest risk to recovery in the uk stems fromhe difficulties facing the euro area. based on trade flows alone, britain is more than six times as opposed to the eurozone as the united states, and that's even before you factor in the impact on confidence and our closely connected financial systems. this coalition government was formed in the midst of a debt crisis in the eurozone. two years later and little has changed. so that is the backdrop against which we have to work. so i believe it's only right we set out our views. we need to be clear about the long-term consequences of any single currency. in britain, in the united kingdom, we've had one for centuries. when one part of our country struggles, other parts step forward to help. there is a remorseless logic to it. a rigid system that locks down each state's monetary flexibility yet limits fiscal transfers between them can only resolve its internal imbalances through painful and prolonged adjustment. so in my view three things need to happen if the single currency is to functi

bank stands behind the currency, and, of course, the structure from such as completing a single market that we've always argued for. >> i welcome the emphasis. does the prime minister agreed the bank of englandand the banking regulators in the uk need to amend the method of operation in order to ensure sufficient money and credit available to fuel the private sector recover and not just more cheap money to stay? can they not learn from america which is doing this very well, and avoid the problems which europe is plunged into by doing it far given that we are doing a? >> i think my right honorable friend makes a very important point. when i say active monetary policy i didn't simply mean a central bank they have complex politics and they need to be given the space to resolve some of these issues and the need to know that their friends like britain will not leave them after the afghan conflict is over but are there for long-term partnerships, friendships and support. >> mr. speaker, of course i associate myself with colleagues with attributes to our serving forces, particularly in afghanistan, and those have given their lives. but on the global economy, with the prime minister continue to make

thank you very much for coming in, rob dobson from market. >>> so a mea culpa from the bank of englandking has admitted the central bank failed to properly identify the potential risks in the banking sector. the bank of england should have given a stronger warning about the financial crisis. >> we should have shouted from the rooftops that a system had been built in which banks were too important to fail. the banks had grown too quickly and borrowed too much and that so-called light touch regulation hasn't prevented any of this. >> mervyn king this there, governor of the bank of england. and banks certainly in focus asia side, as well. boc bank of china for $2.5 billion and they sold it at the lower end of the indicative range. >> heart, as a matter of fact market watchers hold different views on the sale. signals a shift in investment strategy as tomasic was burned by it exposure during the 2008 financial crisis. so the say the investor may want to further trim stakes in underperforming chinese banks. but doesn't necessarily bode ill as temasek picked up a $2.3 billion stake in icbc.

of that. it came from england. it came from banks like the roth childs and the big banks in england and the bank of england controlled the credit markets for all of that. banks are an interesting part of the panic of 1837. for a long time, historians focused on the bank runs at the end of the period as the start. that was the end of when people were panicked. the causation was just as politic political, the whigs are viewed for martin van buren and the democrats are viewed for banks and merchants and the international forces. even when we try to think about it as banks at the center, that's an argument that got shaped in the financial crisis. >> in 2008 crisis, we didn't have too many runs on banks per se. governments stepped in largely to rescue a number of institutions. i was struck by in 1837, there was certainly a call for the government to step in. >> it's interesting in 1837, it's often thought that there were not that many bank runs. they shut themselves down in terms of trading paper money before there could be bank runs. tho

. >> british banks would be at risk because of their loans to eurozone banks, businesses, and people. the bank of englandas developed a contingency plan to protect british banks. >> the british banks are very international. the british banking system is a very large portion of our economy. if the guarantees of the government has given were called, we are the most indebted country in the world. >> however much we may congratulate ourselves, we cannot protect ourselves completely were the worst to happen over there. >> you are lucky newsday on the bbc. still to come, a distant world. the changing face of britain. >> the olympic flame is on its way to the u.k. following the handover in athens. a quick look at what is making front-page news around the world. there are denials there has been a run on deposits. they assured customers things are safe. is thek's fat loot headline. the initial share offering is just hours away. the advertising industry is skeptical of the $100 billion valuation. the trading losses sustained by jpmorgan chase have surged. they are estimated at $3 billion rather than the initial $2

an extraordinary admission of failure over the bank of england's handling of the collapse of -- collapsed during a financial crisis. a photo of chen guangcheng leads many papers. senior advisers to mitt romney have criticized david cameron. >> hillary clinton called on china to protect human rights as a dispute over a leading dissident continues. the two contenders and the french presidential election have accused each other of lying in their only televised debate. let's return to those crucial talks under way in beijing. we can speak to the professor of international political economy at peking university. thank you for talking to us. hillary clinton is calling on china to protect human rights. in return, both countries, the u.s. and china, should respect each other. what do you read into what the chinese president is saying? >> what you have just stated is a kind of standard pattern between american and chinese officials when human rights becomes a topic of discussion. i really do not seek much new in this particular case with this individual. few in china or the united states would wan

of the bank'. s. that's an indicator people are preparing for the worse. they are withdrawing euros. they are sending them to safer havens. the governor of the bank of england warned today "risk of a storm is headed our way." he also added that the eurozone is the greatest risk to recovery. portugal is paying a 11.7%. over the past few days, the big story has been greece. why are investors punishing other countries? listen to this, george. >> this is what they called contagion. the reason for that is they are worried that if greece leaves the system, it would set a dangerous precedent for other countries to do the same. spain has been in the spotlight for many years. there are also lawyers of concern about the autonomous regions -- there are also made about the anonymous region. e autonomous regions. >> contagion. that word again. let's go to india fell. now. i gather the rupee is lower against the dollar. >> investors are getting out of what they perceive as risky at the moment. they think the indian currency is risky. they have dumped it. it is a huge headache for a country that imports more than it exports especially, the things that it buys in the u.s.

the bank of england has left its interest rate unchanged. ions to stimulate the economy at this point. retailer kohl's reporting profit of 63 cents a share. the company's current guidance is below the street expectations of $1.13. you can see what impact that is happening on the stock. the bid is at 48, the ask is at 49.25 after that stock closed at 58.86. >> we're going to talk about all things tech at some point. we have a couple other recent developments. we can talk goldman. we got to do that at some point. also, thinking about yahoo! and what disqualifies -- what's worse, padding your resumÉ answered finding you don't have a computer science degree, hitting on an employee and hiring a -- >> what was she, a social lu lubricant or something, soft core porn? all these things are problems -- >> as he looks at me. >> i'm looking at henry. >> i worked for yahoo! not going to comment. as an employee, i'd love to hear an explanation. not an apology. but how did it get on there. >> if you were running yahoo! it would look better if he had a compu

the bank of england and treasury have developed contingency plans to protect british banks which wouldrobably involve guaranteeing their debt. >> the british banks are very international. the british banking system is a very large portion of the economy, much more than other economies. if the government -- if the guarantee for those banks went cold, we are without doubt the most indebted country in the world. >> however much we in the u.k. may congratulate ourselves for staying out of the eurozone, we cannot protect ourselves completely from the worst of the worst that happens over there. >> still to come, counting down to the dubin the -- to the jubilee. >> the torch is on its way to the u.k. following the handover from athens. >> a quick look at what is making front-page news around el paisld -- spain's denies that they have had a run on their funds. initial share offering is a few hours away. the international health tribune says that jpmorgan chase is estimated at $3 billion loss. the "financial times" reports -- saudi arabia has banned all reporting agencies. and "the *" pays trib

of these crises. it came from evening land, it came from banks like the roth childs and the barrons, these big bans of england and the bank of england kind of controlled the credit markets. but banks are the interesting part of the 1837 crisis, because for a long time historians have focused on the end of the -- that was the end of when people were panicked. the bank rush is the end of a long period of people being really nervous. >> which really don't have any -- i was struck by in 1837 that there was certainly a call for the government to accept in, is that a common theme throughout the financial crises in history? >> it's often thought that there were bank runs, the banks shut themselves down in terms of trading paper money for cold coins. so there weren't that many bankrupts at that point either. but it was a politicized argument in the 1830s. those who wanted government intervention were those who disagreed with martin van buren and andrew jackson's policies. to try to bring back a more gold and silver currency. so i do think calls for government intervention in one way or another are sort of trance hist

the bank of england has been nimble in viggede -- to support growth. and you have to appreciate that we do not -- the validity of policy but of policies. and policy mix, which to us is really one of the reasons why this policy mix in -- >> christine la guardia talking about the economic picture in britain. and i think the i.m.f. are recommending that they cut interest rates. further. more at the website on all our continued economic news. careen la guardia at the treasury near london. the rest of the day's news. the olympic torch arrives. part of the tour in the u.k. ahead of the olympic games in a few weeks eats time. here live in the west of england. kenya's athletes are coming to this part of the world soon including the country of world renowned long distance runners. a lot are still training in kenya. the bbc's correspondent has traveled to the training camp in iten to find out what the secret of their enormous success is. >> we're on a very basic track but the people running around here include the london marathon winner and top athletes. the time

getting hit post the bank of england inflation report. kept qe effectively open, as well.s reported a rise in its profits in the first quarter as demand for its vessels rose. joining us is the ceo. jerry, great to see you. did you fly in or come by ship? look, we've done a lot on container shipping and we know that what's going on with the number of ships currently being built is down. container rates are down. but you're in the leasing business. so i'm actually wondering whether any of that impacts you if you've got long term contracts. >> we're in probably the most boring part of the shipping busine business. but generally speaking the business model is such as long term stable sustainable cash flow derived from long term contracts. >> you have 72 ships that are on long term contracts. but all of the time leases will be coming up for remulnewalrene. shipping rates are low. what are you doing with the leases? presumably shows prices go down. >> the market is low, we go short. the market is good, we go long. it's important to have a good portfolio. you look at our maturity

the governor of the bank of england says that he thought that the euro area was tearing itself apart without any obvious solution. that is not the sort of talk that they like in germany. this week, the german deputy prime manse minister has been in london. -- the german deputy finance minister has been in london. >> do you think that there will be 17 members of the euro? >> yes. >> you cannot be 100% certain? >> what will be a reality in one year is not only by chance but by political will. the engagement of the european union and central bank was to get greece back on track and it will go on. that means that we require a stable government in greece. without this, regaining competitiveness and stability. >> when the governor says that the eurozone is telling itself apart, he is just wrong. >> we are a free country. everyone is free to misjudge the political will of the european union. i think that he is misjudging the activities of the heads of state. this would achieve quite a case of stability. we have achieved the private sector involvement. now we have some challenges because of u

. >> there was no extension of qe yesterday from the the bank of england. ck up as a result. i'm just wondering as the data gets revised down and we have weaker survey data in april, what's the chance of the bank at some point coming back in the year and extending it once again? >> i think the bank of england will make it clear in the inflation report next week, although it's halted qe, it hasn't drawn a line under it and persistent weak growth is one thing that could lead them to do more later in the year. of course the other factor is what's going on in europe and any intensification of the crisis there could lead to the further qe extension. so i think this could well prove to be a pause in qe rather than an actual full start. >> all right. simon, thanks for that. have a good day. christine. >> an uneven growth for the second largest economy. >> that's right, china's consumer price level in april moderated to 3.4% despite strong rise in food prices. but a tempered inflation rate and renewed hopes for immediate easing actions from the central bank actually

coca-cola couldn't run without a balance sheet and i'm saying that if the federal reserve or the bank of england or the bank of canada had some type of asset accounts of you know infrastructure the bridges in the hospitals the health of our forests and wetlands ok perhaps some proxies for the degree of trust and relational capital in society we could actually intentionally attach the creation of money. you know the production of bonds or credit in the private banking sector would also be involved here i think this is a really exciting new frontier and i think it's possible i don't think this is dreaming in color i think in our history abram lincoln basically said as much before he died that the government can create sufficiency of liquidity to want to facilitate the well being of the people of the united states so i think it is incumbent on us as part of this conversation to think about the role of money and how we can reinvent the creation of money ok christopher what do you think about that because a lot of people would say in light of what we just heard from mark is that you know it's still t