Britain's banks are strong enough to withstand any Greek exit from the eurozone but need to keep bolstering their financial strength in the face of the escalating crisis, according to a member of a Bank of England regulatory body.

Michael Cohrs, who is on the committee monitoring financial risks, said the eurozone crisis was unfolding on "an hour by hour" basis and it was difficult to predict where the contagion would end if Greece left the single currency.

In his first interview since joining the Bank's financial policy committee , Cohrs stressed that UK banks were prepared for the Greek crisis but said the committee was on "alert stations".

Events unfolding in the eurozone were the reason why the FPC after its quarterly policy meetings had been urging banks to raise more capital.

"British banks are ready for Greece," Cohrs said. "They have thought about their direct exposures to Greece and they have marked them to appropriate levels, their liquidity is strong and they have enough capital to withstand shocks from Greece. If it goes further it's not clear, and that is why we have been encouraging them to raise more capital because nobody knows where it will stop or it won't stop."

A senior banker at Deutsche Bank during the 2008 crisis, Cohrs said the FPC had met within the last week to discuss, among other matters, the eurozone, which the Bank's governor, Sir Mervyn King, said last week was "tearing itself apart".

An American resident in Britain for 25 years with dual nationality, Cohrs said scenarios being tested fell short of a break up of the euro area. In December the FPC issued a demand for banks to raise fresh capital and in March to step up their efforts to "ensure resilience in the fact of prospective risks".

"I really want to hammer home this point; it was why we're urging British financial institution to prepare themselves and strengthen their capital," he said.

Cohrs is an external member of the FPC which is an important tool in the regulatory framework being designed by the coalition government to tear up the Financial Services Authority and hand more powers to the Bank. Its job is to seek out and eradicate systemic risks in the financial system – tackling the criticism of the previous regulatory regime during the 2008 crisis. Cohrs also sits on the court of the Bank of England, akin to a board of directors.

He said the eurozone crisis was unfolding "hour by hour, day by day at this point and I think it will be [like this] until 17 June" when Greeks go to the polls again.

He was at the helm of the UK arm of Deutsche Bank when Lehman Brothers collapsed in 2008 and sees the eurozone situation as different.

For a start it is not unfolding in the 72 hours it took for the Wall Street firm to collapse in September 2008. "This is not as complex as Lehman Brothers in the sense that Lehman happened quite quickly. Greece has been unfolding before us for a long time and all of the bright minds have been thinking about this."

Financial products related to Greece are now pricing in a default and financial institutions have written down the value of their holdings, which gives him some comfort. "There is some reason to believe this will not be like Lehman, but if you think back to all the events after Lehman there were so many we didn't expect that there could be a couple of surprises here".

Within days of Lehman collapsing, HBOS was rescued by Lloyds and America had to take action to help major financial institutions.

"Every time we hope that things are getting better something happens on the continent that makes us realise that we simply have to continue to be at alert stations," said Cohrs.