Black Monday Warning
Published / Last Updated on 15/06/2010
by Ashley Clark, Director
The Bank of England has warned that investors are betting on a Black Monday-style crash of UK stock markets by around 20%.
The Bank said there the fears come from the possibility of a sovereign debtor collapsing, possibly Greece or Portugal.
According to a report from the Bank for International Settlements, Britain is exposed to the Irish and Spanish banking systems which are said to be at risk.
The main issue now is that whilst bank balance sheets are acceptable, there are various countries within Europe exposed to each other in terms of both private and sovereign debt.
This is an added worry for investors and our view is that switches out of the market and into cash for a period could save a considerable loss.
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