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FXstreet.com (Barcelona) - The debt crisis in the Euro Area is threatening to create a major financial turmoil around the globe, said The BoE governor Mervyn King, who prompted European policy makers to take action in order to avoid a global credit crunch of uncertain consequences in the region.

The latest developments of the Eurozone debt crisis have increased the threat to the global financial stability, said King, who called to action to Eurozone leaders, as the effects of the problems affecting the EU are "characteristic of a systemic crisis."

Economies around the world are affected by the crisis in the Euro Area, including the UK, and the situation could worsen of the EuroZone breaks up, according to King.

The uncertain situation in the region has provoked the restriction in banks' lending to businesses and individuals, which is threatening with a credit crunch in the Euro Area, that, according to King, would extend to the UK.

The main Central Banks agreed on a coordinated action to boost liquidity in Dollars in the financial system. That move will provide some temporary relief said BoE governor, but it can't solve the underlying problems, as the Euro area is facing a problem "of solvency, not liquidity.

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