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Brexit Likely Won’t Spark a Financial Crisis, U.S. Treasury Secretary Jack Lew Says

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Treasury Secretary Lew Chairs Meeting Of Financial Stability Oversight Council
U.S. Secretary of the Treasury Jacob Lew speaks during a meeting of the Financial Stability Oversight Council June 21, 2016 in Washington, DC. The council held a meeting on its "2016 annual report, with an agenda that includes: an update on market developments; discussion of the Board of Governors of the Federal Reserve System's proposed rulemaking that would apply to certain insurance companies; and a discussion of the annual re-evaluation of the designation of a nonbank financial company." Alex Wong—Getty ImagesAlex Wong—Getty Images
By Maya Rhodan

While there have been some economic “headwinds” in the wake of the UK.’s Brexit vote to leave the E.U., there’s no indication that it will lead to another financial crisis, U.S. Treasury Secretary Jack Lew said.

“There is no sense of a financial crisis developing,” Lew said in an interview with CNBC on Monday. “Obviously this is a change in policy that has implications which change the decisions investors make so I’m not saying there’s not an impact in the markets.”

Lew said Monday the impact on the markets, so far, had been “orderly.”

The British pound plummeted in its biggest one-day drop ever on Friday and its value continued to falter against the U.S. dollar on Monday. The U.S. market was off to a rough start on Monday as well, with the Dow Industrial Average, Standard & Poor’s 500 stock index, NASDAQ, and several banks down in morning trading.

Lew said that though he thought the best outcome for the U.K. and European economy would have come had citizens voted to remain, “the democratic process in the U.K. has produced a result.”

“Now the challenge is for leaders in the U.K., Europe, and around the world to manage in times of change,” Lew said.

[CNBC]

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