During the recent press conference Mervyn King, Governor of the Bank of England, told the reporters that the eurozone’s debt crisis threatened the financial stability of the United Kingdom.
According to him, the British banks should provide detailed info on the T-bonds they purchased from the debt-ridden countries and how they defend the national interests in the country’s banking sector.
Mr. King assumes that even though the direct impact of Greece, Portugal and Ireland on the U.K. banking system is restrained, it can come under threat as numerous British banks provided loans for the private sector of the mentioned debt-ridden countries.
The Financial Policy Committee is the Bank of England's new watchdog. Its major task is to identify potential financial crises. The committee is chaired by Mervyn King.
According to the recent report provided by the FPC “Sovereign and banking sector strains in some vulnerable euro-area economies were the most material and immediate threat to UK financial stability…”
During the 1st meeting the FPC also urged the country’s financial institutions to focus on thickening their ‘safety cushions’ even at the expense of shareholders and staff (through cutting dividends and bonuses).
FOREX.
The British Pound keeps losing value against the US Dollar. According to the Department of Masterforex-V trading system , GBPUSD is currently forming a bearish wave - a (C ) or C of H8. The closest support level is 1,5790.
A rally can be considered only after the price has broken above the MF pivot and sloping channel (as shown below).
