LONDON A new global financial crisis is certain to occur and without reform, it is likely to happen sooner rather than later, according to former Bank of England governor Mervyn King.
King, who headed the BoE when the world's financial system almost collapsed in 2008-09, said only a fundamental rethink of the monetary and banking systems could avert another crisis.
"Without reform of the financial system, another crisis is certain, and the failure ... to tackle the disequilibrium in the world economy makes it likely that it will come sooner rather than later," King said in an extract of his new book published by the Sunday Telegraph newspaper.
He added that global central banks were caught in a "prisoner's dilemma" - unable to raise interest rates for fear of stifling the economic recovery, the newspaper reported.
The BoE has held interest rates at a record low 0.5 percent for the last seven years.
Darkening global economic prospects and ructions in financial markets have pushed out investor expectations for the first BoE rate hike into 2019 - an outlook some policymakers view as too pessimistic given continued steady growth in the British economy.
King was succeeded in 2013 by Mark Carney, who on Friday warned that moves by central banks to cut interest rates below zero risked creating a "beggar-thy-neighbour" environment which could leave the global economy trapped in low growth.
(Reporting by Andy Bruce, editing by G Crosse)