"Oh !" Says The Queen

Queen gives the Bank a lesson in economics

Four years ago, the Queen asked academics why no one had foreseen the “awful” financial crisis which has blighted the country ever since.


On Thursday, during a tour of the Bank of England, she effectively answered her own question as she talked about “lax” City workers and a regulator that “didn’t have the teeth” to intervene.

The Duke of Edinburgh, meanwhile, had a typically blunt piece of advice for the Bank’s executives: “Don’t do it again!”

The Queen and the Duke grilled Bank of England staff during a tour of a vault stacked with £27 billion worth of bullion.

Sujit Kapadia, one of the Bank’s financial policy experts, said he wanted to answer a question the Queen had asked academics at the London School of Economics in 2008 about why no one saw the financial crisis coming.

“Oh!” said the Queen, looking slightly taken aback.

Mr Kapadia said the City had got “complacent” because it thought risk was being managed better than it was, and the financial system had become too interconnected.

The Queen agreed: “People got a bit lax ...perhaps it was difficult to foresee.”

She asked if the financial system was less interconnected now and suggested that part of the problem had been the lack of powers given to the Financial Services Authority. “They didn’t have the teeth,” she said.

The Duke, meanwhile, was typically direct. “There’s not another one coming, is there?” he asked. Then, as he left Mr Kapadia and his group, he said: “Don’t do it again!”

Mr Kapadia said afterwards: “It was an honour to be asked, and a pleasure to be able to offer some explanation. I think she recognised that these things are very difficult and it’s not a straightforward exercise.”

Both the Queen and the Duke were invited to sign an unissued £1 million note instead of signing a visitors’ book. As the Duke waited to sign his note, he joked: “Is this just lying about? You won’t miss it, will you?”

In the vault, one of nine in which the Bank stores a total of around £200 billion worth of gold, the couple saw 63,000 gold bars stacked in eight rows. Each four-ton stack is four shelves high, with each shelf holding 80 bars. A gold bar weighs 13kg, worth £423,783 at today’s price.

The Queen and Duke were also shown two gold bars recovered from ships sunk in the Second World War — the SS Fort Stikine, sunk off Bombay in 1944, and HMS Edinburgh, sunk in the Barents Sea in 1942.

The Queen first visited the Bank as an 11-year-old with Queen Mary. Then, in keeping with tradition, she signed a thousand pound note. Inflation dictates that VIP visitors now sign a £1 million note.

As the Queen signed, next to the note bearing her signature from 1937, she said: “It hasn’t improved, really.”

Then, as she passed a woman with tinsel draped round her computer screen, she said: “We like your Christmas decorations.”

Sir Mervyn King, the outgoing Governor of the Bank, thanked the Queen for her visit and described the Bank’s staff as “unsung heroes” who had kept the economy going “in the most difficult circumstances”.