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Narayana Kocherlakota

Markets Didn’t Oust Truss. The Bank of England Did.

The way the UK government fell should worry all who support democracy.

Did she fall or was she tripped?

Did she fall or was she tripped?

Photographer: Yui Mok/WPA Pool/Getty Images

The precipitous fall of former UK Prime Minister Liz Truss’s government has been widely credited to the objective discipline of financial markets. Her misguided policies, the logic goes, elicited such a negative reaction that she had no choice but to backtrack and resign.

I see a very different story. Markets didn’t oust Truss, the Bank of England did — through poor financial regulation and highly subjective crisis management.