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.