• MSN exclusives
Thu, 12 Apr 2012 18:19:03 GMT | By Duncan Hooper

It's not our job to help savers, says Bank of England

Paul Fisher from the Bank tells MSN it's inevitable that some groups will be worse affected by the crisis than others.

Savers can't expect any help from the Bank of England as they endure pitiful returns on their money, a top Bank of England policymaker has warned.

Paul Fisher, answering questions from MSN readers, acknowledged that the public had a right to be angry with politicians, bankers and regulators for allowing the economy to slide into its worst recession ever. But he said it was inevitable that some groups will continue to be worse affected than others.

"I think the public have a right to be angry"

Asked whether the Bank was ready to swing the balance back from favouring borrowers to rewarding savers by pushing interest rates up, Fisher responded: "We have to try and set interest rates for the benefit of the economy as whole. We can't do it for the interests of one particular group rather than another."

"There will be individuals worse off. I've said this is the largest recession we've seen since at least the Great Depression so there are a lot of people worse off, but it's not a case of one person's turn now and another person's turn next."

Fisher is a member of the Bank's Monetary Policy Committee, which sets interest rates, and also sits on the newly established Financial Policy Committee, designed to make the banking system safer.

"We won't ever stop financial crises happening"

He said the latter was a "truly groundbreaking" step towards removing the risk to the whole economy from the failure of a single bank, which was illustrated by the dramatic events following the collapse of Lehman Brothers in 2008. However, he warned that no system could ever insulate the economy completely.

"We won't ever stop financial crises happening, they're global events nowadays," Fisher said. "What we can do is try and make sure the system is more robust so we don't have to use taxpayers' money to bail out the banking system again."

Even though Barclays boss Bob Diamond has hit the headlines in recent days with his £17 million pay packet, Fisher claimed that the banks are responding to demands that they hold back more cash to cushion them from economic downturns, rather than relying on the taxpayer to rescue them.

"We think we are making a difference and we have seen some restraint from the banks in terms of distributions to staff and to shareholders," he told MSN in an interview at his office in the heart of the City of London.

However, he conceded that they still had to bear responsibility for the problems they had caused and should not be surprised at the vilification they have received.

"I think the public have a right to be angry at everybody: this is the biggest global financial crisis ever, it's the deepest recession in the UK since at least the Great Depression and arguably bigger even than that and everybody's been affected. Lots and lots of people are worse off than they were and individual people were not responsible for that so ... of course they have a right to feel angry."

Paul Fisher at the Bank of England (© Image: Bank of England)

Image: Bank of England

Paul Fisher has worked at the Bank of England for more than 20 years

However, the biggest criticism of the Bank of England from MSN readers is its failure to curb inflation. More than half of almost 1,500 participants in the poll said they were unhappy with the efforts made to control the cost of living.

Mr Fisher said that he and his colleagues had been more concerned about preventing the threat from deflation.

According to Mr Fisher, the risks of falling prices and a stagnating economy justified the controversial Quantitative Easing (QE) programme, whereby the Bank prints money to use to buy up assets in the hope that it will stimulate growth in the wider economy.

"What you have to imagine is what would have happened if we hadn't done QE," he said.

"All of those factors pushing up the cost of living [rising fuel prices, the VAT rise] would still have happened but the economy would have been even worse off. Activity would have been lower, unemployment would have been higher and we would have got locked into almost certain deflation and depression."

User Picture
Write a comment...
40Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

more on msn money

msn money poll

Which of these financial mistakes have you made most often?

Thanks for being one of the first people to vote. Results will be available soon. Check for results

  1.  
    3 %
    Accidentally giving wrong information on a credit application
    25 votes
  2.  
    35 %
    Forgetting to make a repayment on time
    349 votes
  3.  
    6 %
    Making multiple credit applications in a short space of time
    62 votes
  4.  
    7 %
    Not checking your credit report before applying for new credit
    74 votes
  5.  
    5 %
    Not staying within your agreed credit limits
    45 votes
  6.  
    22 %
    Taking on too much credit that you’ve then found hard to manage
    222 votes
  7.  
    4 %
    Forgetting to sever financial links with a previous partner
    39 votes
  8.  
    18 %
    Not having enough of a credit record
    180 votes
  9. Skip to results

Total Responses: 996
Not scientifically valid. Results are updated every minute.

It's not our job to help savers, says Bank of EnglandPaul Fisher from the Bank tells MSN it's inevitable that some groups will be worse affected by the crisis than others.Duncan Hooper2012-04-12T17:19:03Savers can't expect any help from the Bank of England as they endure pitiful returns on their money, a top Bank of England policymaker has warned.Paul Fisher, answering questions from MSN readers, acknowledged that the public had a right to be angry with politicians, bankers and regulators for allowing the economy to slide into its worst recession ever. But he said it was inevitable that some groups will continue to be worse affected than others."I think the public have a right to be angry"Asked whether the Bank was ready to swing the balance back from favouring borrowers to rewarding savers by pushing interest rates up, Fisher responded: "We have to try and set interest rates for the benefit of the economy as whole. We can't do it for the interests of one particular group rather than another.""There will be individuals worse off. I've said this is the largest recession we've seen since at least the Great Depression so there are a lot of people worse off, but it's not a case of one person's turn now and another person's turn next."Fisher is a member of the Bank's Monetary Policy Committee, which sets interest rates, and also sits on the newly established Financial Policy Committee, designed to make the banking system safer."We won't ever stop financial crises happening"He said the latter was a "truly groundbreaking" step towards removing the risk to the whole economy from the failure of a single bank, which was illustrated by the dramatic events following the collapse of Lehman Brothers in 2008. However, he warned that no system could ever insulate the economy completely."We won't ever stop financial crises happening, they're global events nowadays," Fisher said. "What we can do is try and make sure the system is more robust so we don't have to use taxpayers' money to bail out the banking system again."Even though Barclays boss Bob Diamond has hit the headlines in recent days with his £17 million pay packet, Fisher claimed that the banks are responding to demands that they hold back more cash to cushion them from economic downturns, rather than relying on the taxpayer to rescue them."We think we are making a difference and we have seen some restraint from the banks in terms of distributions to staff and to shareholders," he told MSN in an interview at his office in the heart of the City of London.However, he conceded that they still had to bear responsibility for the problems they had caused and should not be surprised at the vilification they have received."I think the public have a right to be angry at everybody: this is the biggest global financial crisis ever, it's the deepest recession in the UK since at least the Great Depression and arguably bigger even than that and everybody's been affected. Lots and lots of people are worse off than they were and individual people were not responsible for that so ... of course they have a right to feel angry."Paul Fisher has worked at the Bank of England for more than 20 yearsHowever, the biggest criticism of the Bank of England from MSN readers is its failure to curb inflation. More than half of almost 1,500 participants in the poll said they were unhappy with the efforts made to control the cost of living.Mr Fisher said that he and his colleagues had been more concerned about preventing the threat from deflation.According to Mr Fisher, the risks of falling prices and a stagnating economy justified the controversial Quantitative Easing (QE) programme, whereby the Bank prints money to use to buy up assets in the hope that it will stimulate growth in the wider economy."What you have to imagine is what would have happened if we hadn't done QE," he said."All of those factors pushing up the cost of living [rising fuel prices, the VAT rise] would still have happened but the economy would have been even worse off. Activity would have been lower, unemployment would have been higher and we would have got locked into almost certain deflation and depression." Paul Fisher at the Bank of England(Image: Bank of England)Paul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of EnglandPaul Fisher at the Bank of England

msn money site map