Mark Carney, governor of the Bank of England, has pledge £250bn in additional funding to aid markets in the wake of the UK’s vote to leave the EU.
Speaking today, Carney says the Bank has undertaken extensive contingency planning for the UK’s exit from the European Union.
He adds: “The Bank of England is monitoring developments closely. It has undertaken extensive contingency planning and is working closely with the Treasury, other domestic authorities and overseas central banks.”
“The Bank of England will take all necessary steps to meet its responsibilities for monetary and financial stability.”
He adds that £250bn of funding will be given by the bank to aid liquidity in the market, and it will support foreign currency liquidity if needed.
“As a backstop, and to support the functioning of markets, the Bank of England stands ready to provide more than £250bn of additional funds through its normal facilities. The Bank of England is also able to provide substantial liquidity in foreign currency, if required,” he adds.
“We expect institutions to draw on this funding if and when appropriate, just as we expect them to draw on their own resources as needed in order to provide credit, to support markets and to supply other financial services to the real economy.”
Carney adds: “Inevitably, there will be a period of uncertainty and adjustment following this result. There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold.
“And it will take some time for the UK to establish new relationships with Europe and the rest of the world.”
The Bank expects “some market and economic volatility” as those new relationships are struck.
Carney adds: “But we are well prepared for this. The Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have been in close contact, including through the night and this morning.
“The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.”