Bank of England notes imbalances in global economy

Bank of England Governor Mervyn King called (11-Mar-2011) for a "grand bargain" to bring about a global rebalancing and avert a move towards protectionism. In a speech to the Stanford Institute for Economic Policy Research in California, Mr King stated a resurgence of imbalances should motivate governments to tackle instabilities in the global economy to prevent a repeat of the financial crisis. "The most obvious problem at the global level is that the imbalances are growing again. The current pattern of demand in the world economy is unsustainable. The political tension generated by the divergent preferences of surplus and deficit countries risks moves toward protectionism," Mr King stated.