LONDON (MNI) – UK financial institutions cut their overseas
exposure in the fourth quarter of 2011, with sharp cuts in claims on
Germany and the US.
UK banking groups decreased total foreign claims by $160.8 billion
to $3,963.8 billion in Q4, with claims on developed countries down $134
billion. Exposure to the US was cut by $43.6 billion and to Germany by
$42.6 billion, according to Bank of England data.
In a speech at a Market News International event Thursday BOE
Monetary Policy Committee member Ben Broadbent put UK banks’ overseas
exposure at the heart of the UK’s financial crisis.
“The major UK-owned banks have lost around 15 times on non-UK
mortgages what they have in the domestic market. Overall, around
three-quarters of aggregate losses have been on their non-UK balance
sheets,” Broadbent said.
In the fourth quarter the largest increase in exposure was to
France, with claims up $22.2 billion, primarily reflecting a rise in
local claims, claims by overseas subsidiaries of UK banks, on the French
public sector.
The BOE data are based on total foreign claims on an ultimate risk
basis.
Contact; drobinson@marketnews.com; tel: +44 207 862 7491
[TOPICS: M$B$$$,M$BDS$,MABDS$]
