Bank bosses meet BoE for Brexit update

Bank-of-England-Building-BoE-Bus-700x450.jpgThe chief executives of the five biggest UK lenders, including HSBC and Barclays, were summoned to the Bank of England today to discuss the financial impact of Brexit.

The BoE reassured bank bosses of the large amount of liquidity they will be supported with and urged them to continue lending to consumers and companies to avoid falling into another financial crisis as in 2008, a person briefed on the meeting told the FT.

As well as discussing the market reaction to the referendum result, the bank chiefs discussed how the financial system had functioned amid the volatility in asset prices and the impact the Brexit vote was expected to have on the economy.

The meeting was chaired by a senior central bank official, while BoE governor Mark Carney also made an appearance.

Among other topics, the central bank briefed bank leaders on the possible slowdown in the UK housing market, especially for prime London residential property.

The BoE said it had already undertaken “extensive contingency plans” before last week’s vote and had guaranteed an extra £250bn of liquidity available to support banks on the day of the referendum results.

Since the start of the week, rating agencies Moody’s, Fitch and S&P have lowered their outlook for both the UK banking system and the economy. Moody’s said Brexit will result in a “reduced demand for credit, higher credit losses and more volatile wholesale funding conditions for UK financial institutions”.