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| Britain |
| City watchdog fears euro disaster |
| 2010-06-06 |
| THE City watchdog is stress-testing Britain's biggest banks over fears they could be hit by the growing financial problems of the eurozone. A “risk map' of Europe has been drawn up by senior officials at the Financial Services Authority, examining potential problems on a country by country basis. Banks have been asked to model a number of disaster scenarios, including Greece defaulting on its loans. Analysts estimate that British banks have a total exposure of more than £100 billion to Greece, Portugal and Spain alone. Disclosure of the stress tests underlines how serious financial regulators think the eurozone crisis could become. On Friday, Hungary became the latest country to spread fear across Europe when the new government warned that its predecessor had “falsified data' about the country's public finances. Although Hungary is not part of the single currency, banks across Europe would be hit by any sovereign crisis. The euro slid below $1.20 for the first time since March 2006 on the news. Analysts now expect it to hit parity with the dollar. François Fillon, the French prime minister, said on Friday that the weakening currency was “good news' because it could boost European exports. His comments accelerated the currency's slide and prompted selling of French government bonds. Yesterday G20 finance ministers called for governments to put their national finances in order to calm the international financial markets. Meeting in Busan, South Korea, the ministers also stepped back from plans for a global bank tax following complaints from Canada, Australia, Brazil and India. The meeting also concluded that new bank capital rules should be introduced gradually in an effort to ensure that lending to businesses is not curbed. |
| Posted by:lotp |
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| Posted by: tipper 2010-06-06 15:52 |
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| Posted by: Anonymoose 2010-06-06 12:58 |
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| Posted by: phil_b 2010-06-06 10:04 |
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| Posted by: phil_b 2010-06-06 09:49 |
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| Posted by: Goodluck Smock1954 2010-06-06 09:04 |
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| Posted by: gromky 2010-06-06 07:31 |
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| Posted by: phil_b 2010-06-06 01:09 |