ForexSQ.com - Sovereign and banking risks emanating from the euro area remain the most significant and immediate threat to UK financial stability. These risks have intensified materially since the June 2011 Report. Against a backdrop of slowing global growth prospects, market concerns about the sustainability of government debt positions of smaller economies have broadened to larger euro-area economies (Chart 1). Capital market functioning has deteriorated and risky asset prices have fallen sharply.
