Bank of England, there is hope?

I was rather critical of Mervyn King and the BoE's inability to spot the enormous credit bubble developing in the run up to the current financial crisis. However, I have just been directed to this publication from last year that appears to make a less orthodox economic assessment of the run-up to the crisis "the Great Moderation".  Although, yes the horse had long since bolted. I have only just started digesting this but on the face of it, it is very interesting to see Hymen Minsky cited describing the inherent instabilities of the finance sector. In a nutshell the paper concludes that although established macroeconomic indicators (inflation and unemployment) were stable, credit, balance sheets and asset prices were certainly not, so in the future we should probably keep an eye on these. Halleluja!

One interesting figure that I can pull out straight away is this plot confirming the much debated transfer of  "wealth" from young to old over the past 15 years:

Housing wealth gains are clearly concentrated amongst baby boomers (50-65yrs). Net financial wealth (less pension assets) actually reduces across most age groups but is clearly skewed towards the youngest since they have been taking on proportionately more debt (larger mortgages) and so their liabilities have increased substantially. Only the oldest have seen a net actual increase in financial wealth (less pensions) since this cohort have typically paid off mortgages and come from a more debt averse generation. Across the population the net financial wealth asset (area above line) is clearly smaller than the net financial liabilities (area below line), I deduce that the missing bit must be with the banks!

I do wonder why the more insightful work of the BoE such as this is buried but frankly deluded statements such as "Mortgage debt cut by £8.6bn but Bank of England sees little sign of rush by households to reduce debts" are publicised.