UK cuts exposure to euro laggards by £32bn
Tuesday 31 January 2012
Britain's banks slashed $50bn (£32bn) from their exposure to France, Italy and Spain during the summer as financial institutions ran scared from Europe's debt crisis, according to the Bank for International Settlements (BIS).
The Basel-based BIS, "the central banker's bank", revealed that UK banks' total exposure to the three European strugglers had fallen to $430.4bn at the end of September, against $479.9bn at the end of June.
British banks' stocks of French, Spanish and Italian sovereign bonds were dumped as markets turned on vulnerable European nations.
This is particularly uncomfortable news for France's President Nicolas Sarkozy, pictured, who is likely to seek re-election this year.
The BIS figures revealed that UK bank holdings of French, Italian and Spanish sovereign debt dived by 32 per cent to $55.5bn over the quarter, with holdings of Italian bonds suffering the biggest sell-off.
Instead, banks sought out safety in German bunds, boosting their holdings by more than $40bn during the period.
The European Central Bank's December move to pump nearly €500bn into ailing financial institutions for three years eased the immediate threat of a credit crunch. However, France was stripped of its triple-A credit rating this month, while Italy's debt-laden economy is heading into recession and Spanish unemployment broke throughthe five million barrier.
- 1 Tidal launch: The most pretentious lines from Alicia Keys' valedictory speech
- 2 Trevor Noah: Jon Stewart's replacement faces online criticism over 'anti-Semitic' tweets
- 3 Martha Stewart accuses Snoop Dogg of 'smoking for four hours' during Justin Bieber Roast
- 4 Gamers confess the worst things they've done in The Sims
- 5 Syrian child photographed 'surrendering to camera because she thought it was a gun'
Costa Concordia: Shipment of Mob drugs was hidden aboard cruise liner when it hit rocks off Italian coast, investigators say
Martha Stewart accuses Snoop Dogg of 'smoking for four hours' during Justin Bieber Roast
University of Cambridge: Remains of 1,300 scholars are found under building
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Turkey power cut: Prime Minister says nationwide blackout could be caused by terrorists
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
iJobs Money & Business
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...
£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...
Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...