Unlike numerous other central bankers or Treasury officials turned writers on the financial crisis, Mervyn King refuses to engage in perpetuating a myth. Specifically, he observed
Many accounts and memoirs of the crisis have already been published. Their titles are numerous, but they share the same invisible subtitle: ‘How I saved the world.’
Why might he be unwilling to perpetuate the “I saved the world” financial crisis myth?
Perhaps because he realizes the response to the financial crisis did not in fact save the world.
It did save the bankers. Notice how few of them lost their job or went to jail despite banks paying billions of dollars in fines for bad behavior like rigging the global financial markets.
It did save the 1%. Notice how central banks adopted policy responses to re-inflate asset prices with the justification trickle-down economics would restore global growth.
What the response did not do was save the world. Notice how we are experiencing global economic malaise where demand hasn’t picked up in a self-reinforcing manner despite central bankers pushing interest rates into negative territory and massive fiscal stimulus.
The fact the response did not save the world shouldn’t come as a surprise to anyone. In 2008, before the financial crisis accelerated, I stated the only solution was restoration of transparency. After the acceleration in September 2008, I observed accommodative monetary policy and fiscal stimulus could only buy time and by themselves would not bring the crisis to an end (if they did, Japan would still not be battling its crisis 2+ decades later).
By declining to claim he saved the world, Mervyn King has achieved more than he did as the head of the Bank of England. Specifically, he has laid to rest the myth the response saved the world and he has highlighted the ongoing need for a solution that will save the world.
Hint: transparency will work to save the world (it did once before when it broke the back of the Great Depression), but it will not save the bankers.