LONDON (MNI) – The fallout from the Eurozone sovereign debt crisis
could contaminate the British banking system, but the threat so far is
limited, according to Andrew Bailey, Executive Director, Banking and
Chief Cashier at the Bank of England.
In a speech in Edinburgh Bailey said British banks had taken the
right steps to protect themselves by increasing capital buffers and
lengthening debt maturities.
With renewed worries over peripheral Eurozone countries debt,
Bailey said “This intensification of concerns has raised the threat of
contagion from these countries, and the consequent financial market
developments that have affected several other European countries have
added to the risk of a spill-over to the largest European banking
systems, including our own.”
“So far, the threat has been limited. An important reason for this
is that banks have done the right things over the last two years, namely
to focus on their resilience by refinancing debt at longer maturities
and raising their buffers of capital,” Bailey added.
Bailey also said that the BOE wanted to establish a consensus to
have financial stability as a policy goal.
–London newsroom 0044 20 7862 7491; email: ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MT$$$$]
