King warns 'extraordinary' central banks risk independence

Mervyn King, the outgoing governor of the Bank of England, has warned central banks risk becoming more politicized as a result of their efforts to tackle the banking crisis and subsequent recessions.

In remarks prepared for a speech in Washington, King - who is stepping down from his role in the summer to be replaced by Mark Carney - said the extraordinary measures central banks have had to take to prop up economies have left their status as independent bodies in doubt. "Circumstances have demanded that central banks take extraordinary measures. Such measures can risk moving into territory more normally associated with fiscal policy and, in doing so, put at risk their hard-won independence," he said. King said as a result of their actions, central banks now face three challenges w...