BOE comments on Greece
The Bank of England said it stands ready to “take any actions required” after Greece’s rapid economic slide in just the past few days, Greece beame the first advanced economy to default on a loan to the International Monetary Fund on Tuesday.
The precarious position of Greece could pose a risk to the financial system, the Bank of England said on Wednesday as it pledged to step in to insulate the UK from any shock waves caused by any worsening of the crisis in the eurozone.
The BoE said British banks’ direct exposure to Greece was”very small”, but that their exposure to other peripheral euro zone economies amounted to the equivalent of 60 per cent of the core reserves that they hold against losses.
The Bank said it had been working with the Treasury, the Financial Conduct Authority and European counterparts to put in place contingency plans to tackle the situation in Greece, which has crystallised in recent days but been a focus for policy makers for the last five years. “The UK authorities will continue to monitor developments and will take actions required to safeguard financial stability in the United Kingdom,” the report said. It did not immediately provide any information about the contingency arrangements.
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