The failure of a financial institution has become one of the greatest fears for market participants in the UK, who have reported their highest ever expectation of a "significant event" impacting country's stability, according to a survey by the Bank of England.

Respondents to the UK central bank's biannual Systemic Risk Survey identified continued sovereign risks and the possibility of an economic downturn as their greatest fears for financial stability in the country. Concerns relating to funding and regulation and taxes were also prominent.