The Bank of England issued a warning that the debt crisis engulfing the European Union represents a “key risk” to the British banking system. As such, the BofE advised banks to build up their cash reserves to prepare for the possibility that some EU banks – and even a sovereign nation – could be forced into default.
As evidence that the situation continues to worsen, market expectations of a default by Greece hit an all-time high on Thursday, as the cost of insuring against the country rose sharply.
Source: BBC News
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