Thursday, Apr 26, 2007
BOE warn on credit crunch and commercial property risk
Bloomberg: BOE Says Low Debt Premiums Pose Risk to Stability
The central bank raised its assessments of the probability and potential impact of a shock to the nation's financial system stemming from low-risk premiums on credit. The bank also said there is now a greater likelihood of disruption caused by personal bankruptcies as consumers grapple with record debt.
``Risk-taking is increasing,'' John Gieve, the bank's deputy governor for financial stability, said in a statement in London. Growth in markets for transferring credit risk ``could amplify the impact of shocks like a sharp reversal in credit spreads, from their current low levels.'
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