British banks cut exposure to European debt in fourth quarter

Britain's banks reduced their exposure to European debt in the fourth quarter, Bank of England data showed on Friday, but remained vulnerable to an economic slump in the eurozone. Total claims on developed European countries - which include loans and advances, commercial bills, certificates of deposit and government and corporate bonds - fell to $1.100 trillion from $1.184 trillion in the previous quarter.
British banks cut their exposure to Germany by $42.6 billion to $187.755 billion, as well as to the Netherlands and Spain, but raised it in relation to France by $22.2 billion to $298.229 billion, driven by a rise in local claims on the public sector, the central bank said.
Overall, Britain's financial institutions reduced their foreign claims further by $160.8 billion to $3.964 trillion in the fourth quarter, reflecting a decrease in claims on the bank sector and on the non-bank private sector. By country, exposures to the United States and Germany were cut the most.