THE BANK OF England issued a stark warning today that the dangers surrounding the UK's financial system have risen over the past nine months, reports The Independent.
It said benign economic conditions had made banks complacent about risk-taking, some companies were loading themselves up with worryingly high levels of debt, complex credit derivatives were untested in times of turbulence and some debt-laden households were showing "signs of stress". It said the recent US sub-prime mortgage crisis was a salutary reminder of how credit risk assessment can go disastrously wrong, and how participants can be hit by sharp reductions in market liquidity. In its twice-yearly Financial Stability Report, the Bank said the financial system remained "highly resilie...
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