UK banks have around £136 billion of exposure to crisis-struck Japan,

<p>UK banks have around £136 billion of exposure to crisis-struck Japan, the City watchdog has said.<br />The estimate from the Financial Services Authority (FSA) comes as the country battles to stave off a nuclear meltdown following its devastating earthquake and tsunami.<br />But the FSA said it was "too soon" to estimate the scale of losses for insurers from the disaster.<br />Its comments follow fears over a mammoth claims bill for insurers, which has sent shares in the sector plunging since last Friday's events.<br />News of the banking exposure also comes at a difficult time for the sector, which has been left reeling on concerns over vulnerability to debt-laden Portugal - which suffered a credit ratings downgrade.<br />The FSA said it was trying to establish the total impact Japan's disaster will have on the UK's financial sector. The £136 billion bank exposure estimate, which is based on Bank of England figures, includes loans to Japanese firms in Britain and holdings in Japanese government debt.<br />David Rule of the FSA's prudential risk team, said: "The risk we think is manageable on the banking side. On the insurance side it's early days."<br />One estimate earlier this week put the potential claims bill from just the earthquake at as much as £22 billion.<br />Reinsurers - which insure insurers - are thought to be most at risk, with concerns 2011 profits could be completely wiped out as the Japanese tragedy adds to a series of recent natural disasters, including the New Zealand earthquake and Australian floods.<br />Shares in Catlin, a Lloyd's insurer, have fallen 8% in the past week, while fellow groups Beazley and Hiscox have slumped 9% and 4% respectively since last Friday.</p>

UK banks have around £136 billion of exposure to crisis-struck Japan,

UK banks have around £136 billion of exposure to crisis-struck Japan, the City watchdog has said. The estimate from the Financial Services A...

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