Peru trumps UK in banking stability stakes
The UK has plunged 39 places in a survey on the stability of countries’ financial markets, placing it just behind Peru and El Salvador, a day after the UK Government unveiled a £50bn (€63.3bn) rescue package to shore up the capital of its top banks.
The UK dropped from 5th to 44th in the World Economic Forum’s ‘Executive Opinion Survey’, which polled business executives and financial institutions from around the world on the soundness of countries’ financial sectors.
The survey, released yesterday, used a grading from one to seven with one representing the worst possible operating conditions and seven representing the best. The UK’s score was 5.3.
Canada was top of the ranking and was considered the safest banking system in the world, followed by Sweden, Luxembourg and Australia. The US ranked at 40th in the survey, just behind Germany which ranked at 39th, and behind Barbados, Estonia and Namibia.
The survey is part of the WEF’s annual Global Competitiveness Report, in which the US retained its status as the most competitive economy. Switzerland was in second position followed by Denmark, Sweden and Singapore. The UK also dropped three places and outside the top 10 to12th.
Chancellor of the Exchequer, Alistair Darling, said earlier this week that the government's £50 bailout package for UK banks will give the country's financial system more security.
"We've been working closely with the governor of the Bank of England, with the Financial Services Authority and the financial institutions to put the banks on a longer term sound footing," he said.
--write to lwillington@efinancialnews.com
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