UK banks 'hit hard by eurozone crisis'

12 December 2011

UK banks struggled even more than many of their continental counterparts at the outset of the eurozone debt crisis, a new report has indicated.

According to data published today (12 December) by the Bank for International Settlements (BIS), financiers in Britain were hit hard by the rise in funding costs these financial issues caused.

Throughout the third quarter of 2011, lenders repaid more debt than Portugal, Spain or Italy but sustained net redemptions of $24 billion - a total significantly higher than that recorded for companies based in Italy and France.

"Financial institutions headquartered in Europe - including the UK - in particular had difficulties placing new debt as investors demanded higher credit risk compensation," the document noted.

The group attributed these conditions primarily to the fact uncertainty and tension characterised European markets throughout this time.

Last week, it emerged leaders across the continent have agreed to pump an extra $267 billion into the European rescue fund.

By Asim Shah

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