Bank governor warns of second credit crunch as UK remains vulnerable in eurozone crisis

BANK of England governor Sir Mervyn King yesterday urged banks to brace themselves for a potential eurozone collapse amid fears that the UK is heading for a second credit crunch.

Sir Mervyn said financial systems around the world are vulnerable to the eurozone debt crisis and its underlying causes. However, he warned that a resolution was “beyond the control” of any UK authority.

Speaking in his role as chairman of the interim Financial Policy Committee, he said: “In the UK, we must try to bolster the resilience of our financial system to better withstand the storms that may come in our direction.”