British banks could face potential losses of up to £100bn

Posted by Land Bike at Sunday, June 17, 2012 | 0 comments

The latest data from the Bank of England reveals that UK lenders are exposed to the tune of $142.5bn (£91.3bn) in both Italy and Spain, spelling potentially disastrous consequences for British banks should these European economies collapse. Of the total, British banks have $83.1bn tied up in Spain’s public and private sector, including its banking system, and a further $59.4bn exposure to Italy. UK banks are relatively insulated to the sovereign debt of the weakest European economies compared to other lenders in the eurozone, including those in Germany and France. But they remain highly vulnerable to private sector debt in Italy and Spain, the Bank said, and have significant money locked up in major European banking systems, resulting in “indirect” exposure to the public sector debt crisis. As at the end of December, the period for which the latest figures are available, UK banks exposure to Italy was $59.4bn. Of this, $44bn was private sector debt and just $8.4bn was sovereign debt.