Central banks will smooth Brexit-driven market moves - BIS head

Image
Reuters VIENNA
Last Updated : Jun 26 2016 | 4:22 PM IST

VIENNA (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.

"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 U.S. 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 U.S. "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.

(Reporting by Francois Murphy, edting by Larry King)

*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 26 2016 | 4:08 PM IST

Next Story