The Bank of England has urged banks to bolster their defences so they can withstand an “exceptionally threatening environment” brought about by the euro crisis. Sir Mervyn King, the Governor, said in a press conference that the rapidly deteriorating conditions in the financial markets bore the hallmarks of a “systemic crisis” as he urged banks to shore up their cash and capital reserves. The interim Financial Policy Committee, chaired by Sir Mervyn, is instructing banks to impose limits on their distributions of dividends and bonuses, as they conserve capital in response to threats such as a possible euro breakup. Lenders should also give serious consideration to raising capital from outside sources. Sir Mervyn had earlier told a news conference that co-ordinated action by central banks to get the wheels of the financial system moving again is a short-term fix but is not a solution. The US Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Swiss National Bank and the Bank of Canada announced measures yesterday to provide liquidity to the financial system. In its twice-yearly Financial Stability Report, published today, the Bank warned that “sovereign and banking risks emanating from the euro area have intensified and remain the most significant and immediate threat to UK financial stability.” The Report said that euro-induced strains in the international funding markets were aff

The BBC has reportedly ordered Jeremy Clarkson to apologise for saying that striking public sector workers should be shot, after nearly 5,000 people complained about the remarks. The Top Gear presenter said on BBC’s The One Show last night, as an estimated two million workers held a day of strike action over changes to their pensions, that anyone who had walked out should be killed. Almost 24 hours after the broadcast Clarkson did say sorry, adding that he had not intended his remarks to be taken seriously. The BBC also offered an apology, saying that the item “wasn’t perfectly judged”. The storm broke after Clarkson demanded: “I mean, how dare they go on strike when they’ve got these gilt-edged pensions that are going to be guaranteed while the rest of us have to work for a living?” “I would take them outside and execute them in front of their familie

Britain’s largest police corruption trial collapsed today after a review discovered that files had been destroyed. Keir Starmer QC, the Director of Public Prosecutions, is “extremely concerned” about the collapse of the trial over the wrongful conviction of three men for the murder of Lynette White, a prostitute. The trial judge Justice Sweeney discharged the jury at Swansea Crown Court after ruling that the eight accused former police officers could not get a fair trial. They were jointly charged, along with two civilians, in the biggest trial of its kind involving former police officers in UK criminal history. The officers were alleged to have colluded to pervert the course of justice, leading to the jailing of three innocent men. Miss White, 20, was stabbed more than 50 times at her flat in Cardiff in 1988. Simon Clements, the Crown Prosecution Service