Global banking sector prepared to deal with Brexit fall out

Oliver Gill
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Jaime Caruana, general manager of the BI
Jaime Caruana said a plan is in place (Source: Getty)

Central and private banks are implementing “extensive contingency plans” to contain market disturbance caused by the Brexit vote, said the Bank of International Settlements this weekend.

Speaking at the annual general meeting in Basel today, general manager Jaime Caruana hailed the implementation of such initiatives. Caruana pointed to them as an example of how the global banking sector is well-prepared to deal with economic shocks such as those experienced in the wake of Thursday’s referendum.

“Stronger capital and liquidity buffers in the private sector have made financial systems more resilient to such market disturbances. Central banks stand ready to take the necessary actions to ensure orderly market functioning,” he said.

While Caruana accepted that the UK’s integrated position within the global economy would lead to a period of uncertainty and adjustment, he was confident this could be contained.

“Central banks have acted swiftly in the past, they stand ready to act again, and they have the tools,” he said.