George Osborne has insisted that British banks would "ride out the storm" of the eurozone crisis.
The Chancellor, speaking in the House of Commons yesterday, added that the downgrade of 12 UK banks by Moody's did not reflect a deterioration of the banking system, but the ring-fencing recommended by the Vickers report.
"It is recognition of the success of this government's efforts to reform banking," he said - and extracting commitments from all the high street banks to increase SME lending was part of this guarantee.
Osborne also urged eurozone nations to increase the size of the €440bn bailout fund, and that a 1% rise in interest rates would cost the UK £10bn in extra mortgage costs. He reiterated his claim that Britain will not be a part of any permanent eurozone bail-out fund.
On Dexia, the troubled Belgian bank currently being bailed out by a number of eurozone countries, the Chancellor said that stress tests for European banks were "not nearly tough enough".
And he said the extra £75bn of quantitative easing (QE) we a direct result of the ongoing Greek debt crisis.
Britain "could not be immune from what was happening on our doorstep", he added.
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View from the front row