Bank 'did not understand crisis'

The Bank of England did not understand the severity of economic problems before the current financial crisis, its deputy governor says.
Sir John Gieve told the BBC that the Bank knew "crazy borrowing" was taking place and the price of houses and other assets was rising unsustainably.
But the Bank thought this problem was less serious than it turned out to be, he said in an interview for Panorama.
The Bank relies too much on interest rates to control the economy, he added.
Sir John, who will be stepping down next year, also sits on the Bank's interest rate-setting committee.
In the interview with BBC business editor Robert Peston, he said interest rates were "a blunt instrument", because they affected the whole economy.

Commercial future
Sir John has specific responsibility for financial stability.
He was savaged when interrogated last autumn by the Treasury Select Committee for allegedly being insufficiently on top of the crisis at Northern Rock. His colleagues regarded the attack as unfair.
In his BBC interview, he cast doubt on whether the exchequer would get all of the money back that it has pumped into the banking sector.
"There are some books: Northern Rock, Bradford & Bingley, which the taxpayer's now holding, which clearly have a level of defaults in them, [I'm] not quite sure how that will balance out against the residual of the capital," he said.
"As for the more mainstream banks, yes I think they've got a commercial future and I'm sure that in time they will... revive and start building and growing as commercial entities again."
Meanwhile, the boss of Barclays bank tells the programme that consumers and companies will continue to find it difficult to access credit for the next one to two years.