Bank did not understand financial crisis

The deputy governor of the Bank of England admitted it did not understand the severity of the economic problems before the financial crisis. Sir John Gieve told the BBC that the bank knew ‘crazy borrowing’ was taking place and house prices were rising unsustainably, but the bank thought the problem was less serious than it turned out to be. He also doubted that the Treasury would get all the money back it had pumped into the banking sector.