Pound steady as Sir Mervyn King urges bank recapitalisation

<p>The pound has held its ground following Sir Mervyn King’s calls for banking recapitalisation.</p>

The pound has held firm in forex trading this morning (October 24th) following calls from the governor of the Bank of England for banks to recapitalise.

Sir Mervyn King stated that unless financial institutions take these steps to own up to their bad debts, the economy will not be able to recover.

He also ruled out suggestions the central bank should try and drive growth by giving the public cash or cancelling the government debt it has bought through quantitative easing.

Sir Mervyn said British banks have "insufficient capital" to safeguard against undeclared losses and the sector needs to drop the "pretence" their debts will be repaid.

He warned the next generation may have to live with the consequences of past excesses for a long time.

"Just as in 2008, there is a deep reluctance to admit the extent of the undercapitalisation," Sir Mervyn remarked.

At 09:50 BST, the pound was firm versus the dollar to £1 buying $1.596 and it advanced by 0.5 per cent against the euro to €1.234.

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