The risk of a European default is no longer just a hypothesis for the Bank of England. The Governor of the Central Bank of England, Sir Mervyn King, said UK financial authorities are preparing a contingency plan in the event of a bankruptcy or a breakup of the eurozone. The main motive is to avoid a second credit crunch in the country, in the wake of what followed the financial crisis of 2007-2008.
If the damage is prevented with the right measures, for the United Kingdom the effects of a possible European default would not be too serious and as Sir King recalled, "thehe British banks are better capitalized than European ones. Furthermore – she added – it is reasonable and desirable to build resistance in the face of threats of stability for our country ”.
From this point of view, the plan should provide for new "instruments able to strengthen the solidity of the financial system in view of storms that could come in our direction". Finally, the number one of the Bank of England concluded by recalling that “the European crisis is not one of liquidity, but of solvency” and that the responsibility and ability to find a way out of this situation lies with the governments directly involved.
