BOE Says Debt Crisis Biggest U.K. Financial-Stability Threat

The euro-area debt crisis poses the biggest risk to the stability of the U.K. financial system and banks should build up capital buffers when earnings are strong, the Bank of England said.

“The most serious and immediate risk to the U.K. financial system stems from the worsening sovereign-debt crisis in several euro-area countries,” Bank of England Governor Mervyn King said in London today as the bank published a record of the first meeting of the interim Financial Policy Committee. The FPC is an “important step” toward financial stability, he said.