Warning to banks on eurozone crisis

Dec 1 2011

Bank of England Governor Sir Mervyn King has urged banks to brace themselves for a potential eurozone collapse amid fears that Britain is caught in a second credit crunch.

Sir Mervyn said financial systems around the world are vulnerable to the eurozone debt crisis and its underlying causes - but warned a resolution was "beyond the control" of any UK authority.

Appearing in his role as chair of the interim Financial Policy Committee, the Governor said: "In the UK, we most try to bolster the resilience of our financial system to better withstand the storms that may come in our direction."

The report comes after Downing Street warned that Britain was in the grip of a second credit crunch, and six central banks, including the Bank of England, acted to encourage lending between banks and stave off economic stagnation.