FT: Lunch with Sir Mervyn King

Sir Mervyn King, who is to end 10 years as governor of the Bank of England at the end of June, was recently interviewed by the FT’s chief economics commentator Martin Wolf.

He talked about about exits, euro solutions and about QE and money creation:

“[F]or the past few years, the banking system, which is normally responsible for creating 95 per cent of broad money has been contracting its part of the money supply. And since we at the bank only supply about 5 per cent of it, the proportional increase in our bit has to be massive to offset the contraction of the rest.”

You can read the whole FT article here.