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Greek crisis: Carney warns UK financial stability outlook has deteriorated

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The UK’s financial stability is under threat as a result of the Greek debt crisis, Bank of England governor Mark Carney has warned.

According to BBC News, Carney cites a reduction in the risk appetite of businesses and the potential knock-on impact on households as possible outcomes.

He made the comments at a briefing on the Bank of England’s latest Financial Stability Report. He said: “Events in Greece have tipped the balance to ’the outlook has worsened’.”

However Carney added that Britain’s direct financial exposure to Greece is “minimal”.

He added: “In contrast our economic and financial exposure to the euro area is considerable. Fortunately, the euro-area economy is stronger than a few years ago.

“UK authorities will continue to monitor the situation thoroughly and will take any action necessary to safeguard UK financial stability.”

On Tuesday, the International Monetary Fund confirmed that Greece had missed its deadline to repay a €1.5bn (£1.1bn) loan. It is the first developed nation to fail to repay the crisis lender.

If Greece does not find a solution with its creditors, it could be forced to exit the eurozone, and potentially the European Union.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 1st July 2015 at 5:01 pm

    Apart from the prospect of Greece being forced to drop out of the EU being a step closer, nothing’s changed. Even if Greece manages to pay the latest €1.6 billion being demanded by the IMF, it’ll only be with money borrowed from somewhere else. It’ll still be in debt to the tune of €350 billion that it’s never going to be able to repay. It’s so stupid that it’s laughable.

  2. Steven Balmer 1st July 2015 at 5:53 pm

    I hope the whole house of cards comes falling down. Nothing is going to change this pyramid system other than an apparent catastrophe so bring it on, let the whole lot of it fail.

  3. When Banks complete a securitisation they need at least 2 rating agencies to endorse the transaction and rate the likelihood of the investors getting the money back! Still they got it wrong! But based on data over the last 48 months they predict they next 48 months and include risk waitings for worse case scenarios.They start at £250M ish

    This looks like the biggest bad loan that has ever been made in the history of bad loans ,then a little more then a little more to a Country that could never repay.

    Not to state the obvious but who underwrote it!!!!!!!!!!

    Who specifically is accountable for this mess….Who put there name on every loan! Someone did ! Even if there is an agreement in the next few days it will still fall under the category of “A Little More” once again.

    Greece is a Poor Country ( Sub-Prime) perhaps…They should not have been lent this money…

    Who is going to help them ? Lending them more money is not the answer ! Letting them off is not the answer !

    Someone needs to mediate ! This is the first domino in the next financial crisis that will decimate Europe and the U.K. a economy…..

  4. Weighting not Waiting! Whoops….

  5. Julian Stevens 1st July 2015 at 6:42 pm

    I heard on this evening’s news Wolfgang Schäuble citing that just one of his many reasons for opposing any further cash grants (let us try no longer to pretend that they’re loans) to Greece is that the country has breached numerous obligations with which it agreed to comply as conditions of previous grants.

    How can giving Greece any more money be anything other than throwing good money after bad? It’s not about Greece any more. It’s about salvaging the entire EU. And the longer they put off facing up to this, the worse the inevitable eventual outcome will be.

  6. Google Countries by External Debt….then start worrying !

  7. Steven Balmer has it right, the euro zone is basically a pyramid scheme

    Money,power and control is directed by the bigger participants Brussels, France and Germany (the BFG) and we all know by jumping into bed with this lot, you will (with no doubt) be very expensive and leave you with a condition that will possibly not clear and no-one will want to touch you ever again !

    I do feel for Greece, but as they say there is no fool like an old fool, and you do have to realize if you are 60 running around with a 25 year old there does come a time to pay !

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