5 JULY 2016-Mark Carney, 51 year old Canadian born Bank of England Governor said Tuesday during UK financial stability report news conference that the coordination and corporation among global central bankers was effective in building mutual understanding of the risks in the aftermath of the Brexit vote. He said that that helped to prepare private financial institutions, making sure that the network that was built, whether they are to swap lines or the mechanisms in place, could be used if they were to be used.
“This helped to ensure that if much more extreme scenarios had transpired that the system could arrest them.”
He told global media in a press conference monitored Tuesday by The G&BJournal, that in terms of the spill over of the actual votes, as markets settle down, it heightened focus on the issues of bank profitability and banks balance sheets in some jurisdiction.
“There is a sense of heightened degree of risks aversion for a period of time. So the spill over are notable but the system, globally has worked well and it will continue to do so. We know that in the run up to the vote most aggregate indicators of the global economy showed that the pace of growth has firmed and so the environment was a more constructive environment.” he added.
Carney said that the financial markets are doing their job, adjusting to Brexit change.
The Bank of England in the report said the risks it had feared ahead of the Brexit poll had started to materialise, with sterling plunging to 31-year lows and the shares of banks falling by 20% and took steps to reassure the UK economy reeling from uncertainty by cutting the countercyclical buffer for banks to 0% from 0.5%.
“The move should allow banks to lend an extra £150 billion to U.K. businesses and households to keep the economy flush with credit,” the bank said while admitting that the current outlook for UK financial stability is challenging. This would be Carney’s third concise statement since the outcome of the Brexit referendum which Britain voted to leave Europe.
