Eurozone Debt Crisis Poses 'Biggest Threat To UK's Financial Stability', Warns Financial Watchdog -- Daily Mail
* Banks will be told to hold on to more of their profits to prepare for shocks ahead
* Watchdog discussed limiting dividends to shareholders to help banks build reserves
* Britain will contribute £1bn to Greek bailout
The eurozone's debt crisis poses the biggest single threat to UK financial stability, the Bank of England's new financial watchdog warned today.
Despite the limited direct exposure of UK banks to debt in beleaguered countries such as Greece, the impact on nations such as Germany and France would have a knock-on effect and lead to a tightening of bank funding conditions.
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My Comment: Europe's debt crisis will impact not only the U.K., but worldwide credit markets. Let's face it, if German and French banks are walloped because of a Greek default, the ramifications will be worldwide, impacting literally every financial institution in the world. This would be Lehman Brothers "times" 100.
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