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UK readies euro shock protection

Thursday, June 14, 2012 - 01:46

June 14 - Britain's government and the Bank of England will act together to tackle tightening credit and financial market conditions triggered by the euro zone crisis, finance minister George Osborne said late Thursday. Conway G. Gittens reports.

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UK Finance Minister George Osborne adding weight to a growing belief the world's central banks are ready to support financial markets if the Greek election this weekend sparks panic. Telling a dinner crowd the UK will not stand by and watch the lending market seize up again and threaten economic growth. SOUNDBITE: UK FINANCE MINISTER GEORGE OSBORNE (ENGLISH) SAYING: "The government and the Bank of England have been working closely together to develop the right response and I can tell you today that the governor and I will take coordinated action on liquidity and on funding for new bank lending in order to inject new confidence into our financial system and support the flow of credit to where it is needed in the real economy. We are not powerless in the face of the euro zone debt storm." His comments came shortly after G20 sources said leading central banks would be ready to provide cash and prevent a credit squeeze if markets go crazy on Monday, and set the stage for upcoming G20 talks next week amid fear of a Greek exit from the euro zone. SOUNDBITE: UK FINANCE MINISTER GEORGE OSBORNE (ENGLISH) SAYING: "If exit is the chosen route then the euro zone must have a very good plan in place to prevent contagion. The worst case for everyone would be exit without a sufficiently ambitious response but carrying on with the current uncertainty and instability is not much better. A time for decisions has come." Analysts applaud the call to action, but warn it will take more than just talk of a coordinated decision to finally end Europe's crisis. Conway Gittens, Reuters

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UK readies euro shock protection

Thursday, June 14, 2012 - 01:46