UK banks face eurozone debt audit

The UK banking sector faces a further shake-up as the BoE's Financial Policy Committee (FPC) recommended an audit on banks' exposure to eurozone debt, as well as recommending cuts in dividends and bonuses.

In a report released today, Bank of England chairman Mervyn King said the eurozone debt crisis poses the most serious risk to UK banks. Although UK banks have not lent large amounts to troubled nations such as Greece, they are at risk of financial contagion, the Guardian reports. The report said: "Market concerns remain over fiscal positions in a number of euro area countries and the potential for contagion to banking systems. Any associated disruption to bank funding markets could spill over to UK banks." In another blow to income investors, the FPC also called for banks to direct...