Bank of England plan measures to shield UK from Greece risk

Bank of England governor Mark Carney has revealed plans are being put in place to shield the British economy from the financial crisis in Greece.

The economic crisis in Greece could have a knock-on effect on the UK economy, but the Bank of England (BoE) is taking steps to ensure it remains protected.

This is according to governor of the bank Mark Carney, who said in interviews today (July 2nd) that Greece leaving the eurozone could put the UK at greater risk of financial instability.

Greece defaulted on a loan from the International Monetary Fund this week, and the body has warned Greece it must agree to new economic reforms before it receives any more monetary relief.

However, Greek prime minister Alexis Tsipras strongly opposes the proposals, which include austerity measures such as higher taxes for citizens and an increase in the retirement age. He is staging a referendum on the issue this weekend, encouraging the Greek people to vote against them being implemented. Many ATMs across Greece are running out of money, leaving people unable to access cash.

Greece leaving the euro would put the eurozone at risk of instability but Mr Carney told Sky News the BoE is testing out protection methods that should distance the UK economy from any issues.

He explained while there is "very little exposure to UK banks", contingencies are being put in place.

Many European leaders have criticised Prime Minister Tsipras for his approach to managing the crisis and Mr Carney praised ECB president Mario Draghi for his role, saying the situation could not have been managed any differently.

Pic: Financial Stability Board