BoE finds risk of crisis at its greatest

Of the 68 firms surveyed, 54% thought the risk of a “high impact event” was high or very high.

High impact events include scenarios such as the break-up of the euro, a UK government debt default or a financial institution failing.

The highest risks to the financial system cited by those surveyed were sovereign default and the risk of an economic downturn, both of which were cited by 76% of them.

The report said: “The specific concerns cited in the sovereign risk category related mainly to countries in the euro area.

“As for particular euro-area risks, responses included for example a break-up or collapse of the euro, disorderly debt restructuring, sovereign default and contagion.”

The survey also found that confidence in the financial stability of the UK for the next three years had dropped to its lowest since the second half of 2009.

The survey is part of the Bank of England’s attempts since the financial crisis to spot financial risks earlier.

The research was carried out in the month leading to 21 October and so excludes much of the recent pressure on sovereign debt in countries such as Italy and Spain.