The Bank of England warned yesterday the eurozone debt crisis posed a risk to Britain’s financial system and urged its banks to build up their reserves.
In its Financial Stability Report, the bank praised the 750 billion euro (US$1 trillion) EU-IMF stabilization fund put together last month to prop up the euro after markets took fright at Greece’s debt problems.
However, it warned of continuing “market pressures” which could affect Britain’s financial system. “The IMF and European authorities put in place a substantial package of support,” it said. “While these measures helped to stabilize conditions, market pressures have not yet abated.”
Despite Britain not being a member of the 16-nation eurozone, the bank said the exposure of the country’s financial system to institutions caught up in the currency crisis was a major danger.
It noted there was a risk to Britain’s financial institutions when dealing with “European banks that have direct exposures to countries facing increased sovereign risks.”
The report, which the bank publishes twice a year, also expressed fears over investors retreating from risk in the wake of the crisis, which could endanger banks’ ability to renew billions of pounds in existing funding.
The UK central bank welcomed banks’ efforts to increase their capital, which it said had “helped them weather recent tensions.”
However, it warned of “a number of challenges in the period ahead,” which included increasing lending to help Britain secure its recovery from a record recession and building up bigger reserves in line with expected new regulatory demands.
Britain’s banks “have a collective interest in providing sufficient lending to support economic recovery,” the report said. “They will need over time to build larger buffers of capital and liquidity to meet more demanding future regulatory requirements.”
A tougher new regulatory regime for banks will be agreed later in the year.
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
CELEBRATION: The PRC turned 75 on Oct. 1, but the Republic of China is older. The PRC could never be the homeland of the people of the ROC, Lai said The People’s Republic of China (PRC) could not be the “motherland” of the people of the Republic of China (ROC), President William Lai (賴清德) said yesterday. Lai made the remarks in a speech at a Double Ten National Day gala in Taipei, which is part of National Day celebrations that are to culminate in a fireworks display in Yunlin County on Thursday night next week. Lai wished the country a happy birthday and called on attendees to enjoy the performances and activities while keeping in mind that the ROC is a sovereign and independent nation. He appealed for everyone to always love their
‘EXTREME PRESSURE’: Beijing’s goal is to ‘force Taiwan to make mistakes,’ Admiral Tang Hua said, adding that mishaps could serve as ‘excuses’ for launching a blockade China’s authoritarian expansionism threatens not only Taiwan, but the rules-based international order, the navy said yesterday, after its top commander said in an interview that the Chinese People’s Liberation Army (PLA) could blockade the nation at will. The object of Beijing’s expansionist activities is not limited to Taiwan and its use of pressure is not confined to specific political groups or people, the navy said in a statement. China utilizes a mixture of cognitive warfare and “gray zone” military activities to pressure Taiwan, the navy said, adding that PLA sea and air forces are compressing the nation’s defensive depth. The navy continues to
MISSILE MISSION: The Chungshan Institute of Science and Technology said it does not make policy, but would be glad to obtain certification to assemble the missiles The Ministry of National Defense-affiliated Chungshan Institute of Science and Technology is in the process of getting certified to assemble an additional 1,985 Stinger missiles on top of those from US arms sales, a senior defense official said yesterday. Washington is to send a team to Taiwan to evaluate the institute’s manufacturing capabilities and information security, said the official, who commented on condition of anonymity. The ministry initially bought 500 missiles for the army and navy, but later increased the order to 2,485 in response to an increase in Beijing’s military activities around the nation, and to meet the army’s urgent need
RSS