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LONDON, July 2 (Reuters) - Greece's deepening debt crisishas become "very dangerous" but there is no sign yet of itspreading to other countries on the periphery of the euro zone,Bank of England Deputy Governor Jon Cunliffe said on Thursday.
"We're not seeing signs of that at the moment. Financialmarkets are not showing there is contagion or spreading of thoserisks to the periphery," he said in a BBC radio interview.
Late on Wednesday, a defiant Prime Minister Alexis Tsiprasurged Greeks to reject an international bailout deal, wreckingany prospect of repairing broken relations with European Unionpartners before a referendum on Sunday that may decide Greece'sfuture in Europe.
Earlier, BoE Governor Mark Carney had said that the BoE wasready to take whatever action was required to limit thespillover if Greece were to leave the euro zone.
"It's a very volatile situation. It's a very fluidsituation. It is a very dangerous situation," Cunliffe said.
He added that he hoped Greece and its creditors would beable to restart talks after the referendum, and find a way toavoid Greece leaving the euro zone.
"I very much hope that doesn't happen. I think the Greekgovernment, the Greek people have made clear that they want tostay in the euro, and Greece's partners have made it clear thatthey want it to stay in the euro," he said.
Separately, Cunliffe also said he believed that anydecision by HSBC on whether to move its base outside ofthe Bank of England's jurisdiction would be driven by businessconsiderations, not a search for looser regulation.
Britain has significantly tightened rules on bank pay andcapital requirements since the financial crisis, as well asimposing a special tax on banks' global balance sheets.
HSBC has said it is reviewing whether to remainheadquartered in London or to return to Asia. (Reporting by David Milliken; Editing by Kim Coghill)
HSBC Holdings (HSBA)