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King also warned banks can offer "misleading picture of its financial health" in the First Report of financial policy

The crisis enveloping the euro area is a "catastrophe" that represents "the most serious and immediate" risk to the banking system in the UK, Mervyn King, warned on Friday called on banks to give more information on exposures in the region.

In his new role as chairman of the Financial Policy Committee (FPC), the new "keeper of the British financial system," The King also warned that banks can give a misleading "financial health" if they were not large enough provisions for borrowers struggling to repay their loans. Tolerance appeal was held up to 12% with 30-80% of the mortgages in commercial real estate.

Bank shares

led the FTSE 100 down amid fears of further losses for bad debts in the sector and after that the king has called on banks to accumulate more capital when financial conditions permit, instead of paying dividends to shareholders or bonuses to staff.

"In good times, banks must hold more income instead of distributing them to shareholders or to compensate," said the king.

King asked if the crisis in the markets - caused by fears that Greece might default - could trigger a collapse of the magnitude of that caused by the collapse of Lehman Brothers. He replied:

"I'm not sure that the sovereign crisis and now what happened in the case of Lehman Brothers, have much in common, apart from the fact that it's a disaster . "

exposure of British banks

to Greece was directly "very small", he said, but warned that the biggest risk was a "crisis of confidence."

"There is always uncertainty about the extent of exposures to counterparties ... there are those who are at high risk, "he said. "This uncertainty can lead to different points of donor banks ... to go back and can not be a crisis of confidence in the feeling. "

He said he needed more data on exposures to allay any unnecessary anxiety.

As Governor of the Bank of England, which is automatically activated during the presidency of the FPC, a key point of the coalition's response to the financial crisis. When the law gives new powers next year, the FPC is designed to be able to stop the bubbles are created, for example, requiring banks to hold more capital.

met for the first time last week and held the first of his quarterly press conference on Friday, indicating the concern of the membership list, prepared by the Bank of England and Financial Services Authority (FSA) with four external members.

. Establish practices of tolerance banks to households and businesses worldwide.

. Advise bank to raise capital when they are profitable.
. To advise the FSA to ensure sufficient bank capital set aside during periods profitable.

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