BoE Governor King Says Central Banks Need Additional Tools, Exit Strategy

[B]BoE’s King said the G20 needs to commit enough resources to reverse the extraordinary fall in global demand[/B]. In a speech late yesterday and ahead of the G20’s leaders summit in London in two weeks, the BoE Governor stressed that the G20 need to make a credible promise that banks will be restructured and recapitalized, but also to identify a coherent exit strategy for policy actions to be unwound - “at some point central banks’ balance sheets will have to contract”. King also said that central banks need additional tools to control growth within the financial sector as interest rates are too blunt, such as the requirement for banks to raise more capital during good times.