Fed ready to help central banks after Brexit

By Ovunc Kutlu

NEW YORK

The Federal Reserve said Friday that it is ready to help other central banks after the U.K. voted to leave the EU and plunged financial markets and economies around the world into a tailspin.

"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," the bank said.

The Fed had considered U.K. leaving the EU a possible risk against the U.S. economy and when the bank decided last week to keep its interest rate unchanged, it said the Brexit played a role in its decision.

“Brexit could have an impact on the U.S. economy ... it was one of the factors in today’s decision,” Fed Chair Janet Yellen said during the bank's June meeting.

She reiterated those cautious sentiments during her semiannual testimony before the Congress, telling lawmakers that a "Brexit ... could have significant economic repercussions.”

The results announced early Friday of the U.K. vote to leave the EU has had a negative effect on financial markets from Asia to Europe and North America.

Indexes in the U.S. stock market lost as much as 3.7 percent at the opening bell, while major investment bank's stock values fell around 5 percent to 10 percent.