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Tuesday, 28 June 2016 00:03 - - {{hitsCtrl.values.hits}}
Reuters: Major central banks will limit market turbulence as much as possible after Britain voted to leave the European Union, the head of the Bank for International Settlements said on Sunday.
Some of the world’s biggest central banks offered financial backstops on Friday to soothe plunging markets after the British referendum, and some intervened in currency markets as they worried that the volatility could hit growth.
The BIS, a Switzerland-based forum of major central banks that is holding its annual general meeting this weekend, said on Saturday evening that central banks are ready to cooperate to support financial stability.
Jaime Caruana, general manager of the Bank for International Settlements, attends a conference during the 2016 IIF G20 Conference at the financial district of Pudong in Shanghai, China, 25 February – REUTERS
“There is likely to be a period of uncertainty and adjustment,” BIS head Jaime Caruana said in the text of a speech to be delivered on Sunday. “With good cooperation at the global level, I am confident that uncertainty can be contained and that adjustments will proceed as smoothly as possible.”
The Bank of England has offered to provide more than 250 billion pounds plus ‘substantial’ access to foreign currency to ease any squeeze in markets, and Governor Mark Carney has said it would consider more measures if needed.
The US Federal Reserve has said it is ready to provide dollar liquidity through its swap lines with central banks, “as necessary, to address pressures in global funding markets, which could have adverse implications for the US ‘economy’.
Caruana said stronger capital and liquidity buffers put in place by banks had made markets more resilient in the face of disturbances, and central banks were ready to ensure markets keep working in an orderly manner.
“Central banks have acted swiftly in the past, they stand ready to act again, and they have the tools,” he said.
