As financial markets adjust to a post-Brexit world, central bankers are rushing to try and restore calm.
The immediate reaction to the UK vote to leave the European Union was a harsh sell-off that in which the pound plummeted and markets around Europe followed their Asian counterparts sharply lower.
The Bank of England governor Mark Carney has already said he will prop up markets with a £250bn loan to banks to mitigate the market turmoil. Carney said a significant "backstop" would be put in place to "support a functioning market".
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Other banks have had to react to falling currencies and stocks in their own markets.
The possibility of Brexit was one factor mentioned by Fed chair Janet Yellen in its decision to hold interest rates at its latest policy meeting. At a Senate hearing this week she warned a vote to Leave could have "significant economic repercussions".
The Fed said this afternoon it was "carefully monitoring" the reaction to the vote and would work with other central banks to ensure financial stability:
The Federal Reserve is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the UK referendum on membership in the European Union. 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 US economy.
The European Central Bank (ECB) echoed Mark Carney's statement, saying it stood ready "to provide additional liquidity, if needed, in euro and foreign currencies":
Following the outcome of the UK referendum, the European Central Bank (ECB) is closely monitoring financial markets and is in close contact with other central banks.
The ECB has prepared for this contingency in close contact with the banks that it supervises and considers that the Eurozone banking system is resilient in terms of capital and liquidity
The Swiss National Bank has stepped in to secure its currency markets to weaken its franc in the wake of Brexit.
It said in a statement:
Following the United Kingdom’s vote to leave the European Union, the Swiss franc came under upward pressure. The Swiss National Bank has intervened in the foreign exchange market to stabilise the situation and will remain active in that market.
The SNB does not usually comment on its activities but does so in extreme circumstances, most recently in June last year at the height of the Greece financial crisis.
India’s central bank, lead by governor Raghuram Rajan, has said it is ready to provide liquidity support and any other necessary steps to stabilise markets.
The vote for Brexit sent the Indian rupee along with other currencies across Asia sharply lower. The rupee was already on a losing streak after Rajan announced his departure from the bank earlier this month.
Rajan said in a statement:
We are continuously maintaining a close vigil on the market developments, both domestically and internationally.
The Indian economy has good fundamentals, low short term external debt, and sizeable foreign reserves. These should stand the country in good stead in the days to come.
The Hong Kong Monetary Authority’s chief executive Norman Chan spoke to journalists after the vote result came in and the Hong Kong benchmark Hang Seng index closed the day down 2.92 per cent.
He said Hong Kong's financial centre remained “highly liquid” and “robust”, and would continue to “function smoothly” despite the “notable volatility” in global markets.
He also said he expected the UK to negotiate a good deal for leaving the EU.
“In the coming months the UK will negotiate a prosperous arrangement for leaving the EU,” Chan said.
The Monetary Authority of Singapore (MAS) said the Singapore dollar remained within its policy band despite heightened volatility in forex markets following the vote.
Singapore’s central bank manages inflation through the exchange rate rather than by controlling interest rates.
The Singapore central bank said in a statement:
MAS will provide additional liquidity to the banking system if needed… MAS will continue to be vigilant and stay in close contact with fellow central banks and regulators, as uncertainty is likely to persist following the referendum outcome.