Major central banks sing the same tune after Brexit

In the wake of the UK vote to leave the EU, the world's leading central banks appeared to have coordinated their public statements. They sang from the same song sheet in their statements to reassure markets about their commitment to provide liquidity and take policy measures as needed to fulfill their statutory responsibilities.

Let's have a look what each of the major central banks had to say:


BOE - "ready to provide additional funds"

Mark Carney, Governor of the Bank of England, in a televised statement following the EU referendum result:

... 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.

In the coming weeks, the Bank will assess economic conditions and will consider any additional policy responses."

The BoE also put out on its website a list of answers to most frequently asked questions about Brexit.


ECB - "ready to provide additional liquidity"

In a press release headlined "ECB is closely monitoring financial markets", the European Central Bank said:

"The ECB stands ready to provide additional liquidity, if needed, in euro and foreign currencies.

The ECB will continue to fulfil its responsibilities to ensure price stability and financial stability in the euro area."


Fed - "prepared to provide liquidity"

The U.S. Federal Reserve said in a two-sentence, one-paragraph statement:

"The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."


G7 - "ready to use the established liquidity instruments"

G7 Finance Ministers and central bank Governors in a statement:

We recognize that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.

G7 central banks have taken steps to ensure adequate liquidity and to support the functioning of markets. We stand ready to use the established liquidity instruments to that end.

We will continue to consult closely on market movements and financial stability, and cooperate as appropriate.


Japan - "will take appropriate measures as necessary"

Japanese finance minister and central bank governor issued a join statement:

"The Ministry of Finance will monitor further developments of the foreign exchange market more carefully than before and take appropriate measures as necessary. Such measures are consistent with the agreements in G7 and G20.

We are also aware of risks related to liquidity funding in foreign currencies. In this regard, a network of currency swap arrangements is already established by the central banks of major countries. The Bank of Japan will take appropriate measures as necessary, including activation of this network."