Firms rate foreign country default as biggest risk
The risks of a foreign country defaulting on its loans and an economic downturn are the two greatest risks to financial institutions, according to a biannual survey.
The Bank of England's 'Systemic Risk Survey' found that these seven risks were the most commonly cited by respondents from 73 institutions including banks, building societies and insurers:
- 'Sovereign risk' (foreign country defaulting) cited by 79% of respondents
- Economic downturn - 79%
- Funding risk - 45%
- Risks around regulation/taxes - 40%
- Risk of financial institution failure/distress - 25%
- Financial market disruption/dislocation - 21%
- Property price falls - 21%
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