No indication of financial crisis from Brexit: Jacob Lew

Following a decision to exit the EU, Britain would need to negotiate the terms of its withdrawal and a new relationship with the EU

Brexit
<b> Shutterstock <b>
IANS Washington
Last Updated : Jun 28 2016 | 11:16 AM IST

US Treasury Secretary Jacob Lew has said there is no indication that Britain's referendum to leave the European Union (EU) would lead to another financial crisis.

"There's no question that this is an additional headwind, but I think that it is something that we can manage through and Europe and the UK can manage through," Lew said in an interview with CNBC on Monday, Xinhua news agency reported.

"You've seen policymakers act in a very responsible way in the days leading up to and through the vote. There's no sense of a financial crisis developing."

While global stock market tumbled sharply and the British pound plunged to a 31-year low against the US dollar following Britain's referendum result, Lew said the impact on the financial markets had been orderly so far.

"Obviously this is a change in policy that has implications which change the decisions investors make so I'm not saying there' s not an impact on the markets, but it's been an orderly impact so far," he said, noting that European banks are "better equipped" to deal with the Brexit than they would have been in 2008.

Following a decision to exit the EU, Britain would need to negotiate the terms of its withdrawal and a new relationship with the EU.

Lew said he expected to see a long period of change in Europe and a lot of attention would be paid to policies, actions and words used by policymakers.

"The more there's a focus on restoring confidence, the more there's a focus on maintaining conditions to promote growth, the better," he said, urging all the governments around the world to use all tools available, including fiscal policy, monetary policy and structural reforms, to promote economic growth in response to the Brexit.

*Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Exclusive premium stories online

  • Over 30 premium stories daily, handpicked by our editors

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Jun 28 2016 | 5:22 AM IST

Next Story