Italy a bigger threat to UK than Greece
Italy’s debt problems pose an even greater risk to the British economy than a Greek default, according to Lord Turner, the chairman of the Financial Services Authority.
By Harry Wilson
01 Nov 2011
Giving evidence to the Treasury Select Committee on Tuesday, Lord Turner said that while the direct exposure of British banks to Italy was not large, the country’s financial crisis, if it got worse, would be more damaging to the UK than those of Greece, Ireland and Portugal.
“Italy is the most concerning. That is the most important thing for us to focus on,” he said.
The Italian government is currently looking at ways to cut the country’s public sector debt of close to €2 trillion (£1.8bn) as well as sales of state assets.
Speaking on Tuesday, a senior Italian banker told The Telegraph that he thought it was “highly unlikely” Italy’s problems would ever get as bad as those in Greece, where the government on Monday called for a referendum to vote on a multi-billion euro bailout package.
Lord Turner’s comments will add to fears about the strength of the British financial system to stand up to a new crisis.