KEY POINTS:
The Bank of England issued a stark warning yesterday that the dangers surrounding the UK's financial system have risen over the past nine months.
In its twice-yearly Financial Stability Report, the bank said benign economic conditions had made banks complacent about risk-taking, some companies were loading themselves up with worryingly high levels of debt, complex credit derivatives were untested in times of turbulence and some debt-laden households were showing "signs of stress".
It said the recent US sub-prime mortgage crisis was a salutary reminder of how credit risk assessment can go disastrously wrong.
- AGENCIES
