Central banks will bid to smooth Brexit moves

BEIJING - 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 June 26. 

Some of the world’s biggest central banks offered financial backstops on June 24 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 June 25 in the 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 scheduled to be delivered yesterday. “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.   

Another resignation

Meanwhile, Gloria de Piero, youth policy chief for Britain’s opposition Labour Party, resigned yesterday, British media reported. 

Reports said that De Piero wrote to party leader Jeremy Corbyn to say she did not believe he could deliver a Labour victory at a general election, which may take place within months after Conservative Prime Minister David Cameron announced on June 24 he would step down by October.