Britain's banks are not 'worryingly' exposed to Irish banks or Irish government bonds, Financial Services Authority Chairman Adair Turner said today.
The exposure to Irish bonds was 'not at all worrying in their scale,' Turner told British lawmakers.
'Nor indeed is direct exposure of UK banks to Irish banks out of line with what you would expect,' he added.
Britain's main exposure was to the Irish economy as two banks, RBS and HBOS, have significant business in Ireland, he added. RBS owns Ulster Bank here and HBOS owns Bank of Scotland (Ireland).
UK press accepts need to fund Ireland rescue
Britain's press has grudgingly accepted the necessity of its government's proposed multi-billion-pound loan to Ireland, despite only recently having taken severe steps to reduce its own debt.
Finance minister George Osborne said yesterday he was considering a loan of about £7 billion sterling as part of an international bailout of Ireland, whom he called 'our very closest economic neighbour'.
'The chancellor is right,' The Times' leading article said. 'Britain should support Ireland in its adversity, because an intensification of Ireland's crisis would damage Britain too,' it said.
'That does not mean that Ireland's financial crisis is Britain's fault,' it added. 'It is, rather, the outcome of Irish domestic decisions that were misguided at the time and have proved disastrous.'
The loan proposal comes only a month after Osborne unveiled Britain's harshest spending cuts for decades, slashing budgets by around a fifth and taking the axe to the country's comprehensive welfare system.
The left-leaning Guardian broadly supported the loan but questioned how the coalition government could afford it. 'The UK government was right to put its shoulder to the wheel this weekend,' its editorial said.
'The public will ask why Mr Osborne can find up to £10 billion for Irish voters when he is taking so much away from British ones. Labour will ask why the coalition is willing to stimulate the Irish economy but not the UK one.'
The euro-sceptic Sun, Mail and Telegraph were more damning in their assessment. 'Britain pays the price of the euro's failure,' claims the Telegraph's editorial.
The Mail ran with the headline 'Who will we have to bail out next?' on its front page, asking in its editorial whether Britain didn't have 'problems enough of our own without having to rescue our profligate neighbours?'
The Sun tabloid claimed it single-handedly helped Britain avoid Ireland's situation. 'Ireland's humiliating fate could so easily have been ours if it wasn't for the Sun,' the paper's editorial claimed.
'We are proud that our relentless and unyielding campaign to stay out of the euro galvanised public opinion...and saved Britain from economic catastrophe,' it added.
