"NO ONE OF THE UNDERLYING CAUSES OF THE CURRENT CRISIS HAVE BEEN REMOVED"

Mervyn King Governor of the Bank of England 
March 11 2011

“…
Output was cushioned only through an unprecedented policy response around the world. … Yet this extraordinary policy response has simply postponed much of the required adjustment in spending patterns around the world. And long-term real interest rates are unsustainably low.
… the distortion from a “too important to fail” implicit subsidy to the funding costs of banks in the industrialised world led to excessive leverage in these countries.
...
There is much to do. None of the underlying causes of the current crisis have been removed. The problem of “too important to fail” banks is still with us. …
Today, the most obvious problem at the global level is that the imbalances are growing again. And continuing high debt levels, although in many ways a natural response to low long-term interest rates, leave indebted countries particularly vulnerable to a rapid reversal of high saving rates in surplus countries and a rise in long-term interest rates – surely inevitable in the long run – which would drive down asset prices.
 It is clear that these vulnerabilities affect us all. So recognising our common interest in moving to a more sustainable pattern of world demand is in our self-interest. …”

EKAI Center:

A new opinion in favor of rebalancing global demand. But ... was not precisely this imbalance one of the great advantages of commercial "globalization"?

Attached: Full text (english):