UK banks 'must be prepared for eurozone escalation', says Mervyn King

29 November 2011

Provisions need to be made to ensure the British banking system is in a strong enough position to cope with the potential knock-on effects from the eurozone debt crisis.

That is according to Mervyn King, governor of the Bank of England, who believes the relevant authorities in the UK need to be on standby to implement action should the issues on the continent continue to escalate.

Speaking at a Parliamentary committee meeting, Mr King indicated that the ongoing problems in the eurozone have had a major impact on Britain's fiscal recovery and will continue to do so in the near future.

"What we have to do is ... make sure that as far as possible our banking system is as robust as possible to withstand whatever shocks that come from the eurozone," he was quoted by Bloomberg as saying.

This comes after Stephen Hester, chief executive of the Royal Bank of Scotland, indicated that UK banks are not currently seen as an attractive investment area.

By Gary Cooper

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