UK and Europe Face Mutual Assured Destruction if They Botch Brexit

The Bank of England will prevent any immediate fall-out from a Brexit vote with the help of central banks across the world

by Ambrose Evans-Pritchard

Whatever the result of Britain’s referendum on the EU we can be sure of one thing: there will not be a global financial crisis the next day.

Nothing dreadful will suddenly happen. The US Federal Reserve, the European Central Bank, the Bank of Japan, and the Olympian fraternity of money printers will stand with the Bank of England, ready to flood the international system with liquidity.

The central banks have had months to prepare, and they have prepared. Currency swap facilities are in place to cover the dollar funding needs of UK-based banks, and many of these are well-insulated branches of American, European, Asian, and Mid-East banks in any case.

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