CONTINGENCY plans are in place to protect British banks in what George Osborne described as the "most dangerous time for the global economy" since the 2008 crash.
But the Chancellor, using an emergency Commons sitting to update MPs on the turmoil in the global markets, insisted that British lenders were "able to cope with the current market turbulence".
Mr Osborne acknowledged that "expectations for this year's growth have fallen" as he warned MPs that the recovery would take longer than hoped.
But he insisted that the UK remained a "safe haven" in the global crisis and stressed that he would continue with the Government's deficit-reduction programme.
Mr Osborne said: "History teaches us that recovery from this sort of debt-driven balance sheet recession was always going to be choppy and difficult and we warned that was the case.
George "But the whole world now realises that the huge overhang of debt means that the recovery will take longer and be harder than had been hoped.
"Markets are waking up to this fact and that is what makes this the most dangerous time for the global economy since 2008.
"I think we should be realistic about that, I think we should set our expectations accordingly."
He told MPs that he had discussed the situation in the markets with Bank of England governor Sir Mervyn King and was assured that British banks would be able to weather the economic storm.
"I spoke again yesterday to …