London (MNI) – UK banks slashed exposure to France, lowered
exposure to Italy and Spain and boosted Dutch and German exposure in the
third quarter, according to Bank of England data.
The data show UK banks gravitating towards the “hard core” of the
euro area and limiting exposure to some of the under pressure parts of
the Eurozone.
The BOE’s analysis showed foreign claims on developed countries by
UK banks and building societies rose by US$11.8 billion to US$2,638.7
billion in Q3.
This rise was driven by increased claims on Germany and the
Netherlands, with German exposure rising by US$40.3 billion and to the
Netherlands by US$21.1 billion. The BOE said this was “driven by the
public sector” – that is, largely, by exposure to those countries’
sovereign debt,
The largest decrease was exposure to France, which fell by US$29.3
billion in Q3, again primarily due to reduced exposure to the French
sovereign debt.
The figures tally with portfolio flows reported by market
participants, with financial institutions boosting holdings in Germany,
Netherlands, Sweden and the US and limiting French, Italian and Spanish
risk.
–London bureau tel.: +44 207 862 7491. Email: drobinson@marketnews.com
[TOPICS: M$X$$$,M$$BE$]
