April 7, 2015
The Bank of England is pushing U.K. banks to have plans in place in case the Greek debt crisis escalates or the country leaves the euro area.
While lenders have reduced ties with Greece, the BOE said exposures to highly indebted euro-zone nations remain “significant” and carry “material risks.” Staff are working with the U.K. Treasury and the Financial Conduct Authority to ensure contingency plans are in place. The BOE also issued a warning about Britain’s record current-account deficit.
The comments from the BOE’s Financial Policy Committee follow a statement from the panel last month about potential market stresses related to turmoil in Greece and elsewhere. These could lead to increased market volatility because of a shortage of liquidity, undermining financial stability.