Quote from article "restore the capital position of the UK banking system". Here is his stark and gloomy warning: "I am not sure that advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values and recapitalisation of their financial systems." He continues: "Only then will it be possible to return to a more normal provision of vital banking services so crucial to an economic recovery". Losses fears Sir Mervyn is fearful that we will repeat the mistakes of the 1930s in hoping that borrowers struggling to keep up the payments will one day be in a position to repay what they owe. Far better, he says, to turn off the life support for over-indebted businesses, households and even governments, write off the debts and start again. Or to put it another way, the socially responsible behaviour of British banks in engaging in what is known as forbearance, by allowing overstretched debtors to take a holiday on payments, may now have become a burden on the economy as a whole - by keeping the banks in a state of permanent anxiety that one day they will incur huge losses on loans to these debtors. http://www.bbc.co.uk/news/business-20047863
