NEW YORK (TheStreet) -- The former central bank chiefs of the U.S. and U.K. reportedly told a private audience earlier this week the global economic recovery has taken a lot longer than either expected.
Speaking at a CME Group (CME) - Get Report conference in Florida, former Federal Reserve Chairman Ben Bernanke and ex-Bank of England Governor Mervyn King expressed pessimism about a recovery in Europe, with King more bearish than Bernanke.
The views of the former central bank chiefs were expressed at a closed-door session Monday. Their remarks were recounted to TheStreet by commodities industry executives who were in attendance. The session was moderated by Financial Times Managing Editor Gillian Tett.
King, interviewed by TheStreet following the session, declined to discuss what he and Bernanke had said. A representative for Bernanke at the Washington Speakers Bureau did not respond to emails or a phone call.
Six years since the financial crisis, the U.S. economy has mostly recovered. Europe, in contrast, continues to struggle in many respects, with high unemployment and GDP growth for the euro area stubbornly below 1%.
In an interview with Bloomberg Television at the same event in Florida, King said stagnation in the eurozone poses the biggest risk to a global recovery because "I don't think the leaders in the euro area actually have a true vision of how to cope with the problem." He said Europe's leaders are trying to put in place structural reforms "but that is not going to be sufficient to generate a recovery. They also need to have macroeconomic stimulus."
Economics data last week showed Germany and France posted growth in the third quarter, Bloomberg News reported, but Italy's economy shrank in the second quarter.
At the CME session, Bernanke and King also talked about bitcoin. Asked by an audience member about the crypto currency, both former central bank chiefs agreed bitcoin is a bad investment.
King said one of the lessons from the financial crisis is not investing in things you don't understand. He said the algorithm used to help determine the value of bitcoin may prove problematic. Bernanke, meanwhile, said the potential for bitcoin to be used to fund illegal activities means it would probably result in regulators shutting it down if its use became widespread.
King also joked about being asked for investment advice by an audience member, saying the only other person who had asked him for investment advice was a taxi cab driver.
Bernanke said the Federal Reserve could handle rising interest rates without sustaining major losses to its bond portfolio.
The two also discussed remarks by former French President Nicholas Sarkozy made during an earlier session at the meeting. Sarkozy said the 18 countries that have adopted the euro as their common currency need to work harder to form a more solid union than they have currently, and to distance themselves from the 10 European Union countries that have not yet adopted the euro.
Bernanke and King were impressed, saying they had never heard a European politician make such a statement. Sarkozy said he didn't think Ukraine should be admitted to the European Union because a buffer zone is needed between the European Union and Russia.
A representative for Sarkozy, also at the Washington Speakers Bureau, did not respond to emails or a phone call.
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