Top US regulators discuss possibility of Britain leaving EU: Treasury

By: | Published: June 22, 2016 7:40 AM

The heads of the US financial regulatory agencies, including Treasury Secretary Jack Lew, conferred on Tuesday about the upcoming "Brexit" vote in a regularly scheduled meeting closed to both the public and the press, according to a statement from the Treasury Department.

Jack LewThe heads of the US financial regulatory agencies, including Treasury Secretary Jack Lew, conferred on Tuesday about the upcoming ?Brexit?. (Reuters)

The heads of the US financial regulatory agencies, including Treasury Secretary Jack Lew, conferred on Tuesday about the upcoming “Brexit” vote in a regularly scheduled meeting closed to both the public and the press, according to a statement from the Treasury Department.

“During the executive session, the council discussed recent market developments, including the possibility of the United Kingdom’s separation from the European Union,” it said in a summary of the meeting.

On Thursday this week Britain will vote in a referendum on whether to remain a member of the European Union, with an exit from the EU popularly dubbed “Brexit”.

Also Read: Brexit helped keep Fed on hold, could slow future US rate rises

The Financial Stability Oversight Council, made up of the chiefs of all the financial regulators, is charged with assessing potential hazards to the country’s financial system and heading off risks that could lead to another crisis on the magnitude of the 2007-09 meltdown.

Other members at the meeting included Commodity Futures Trading Commission Chair Timothy Massad, who has worked with his European counterparts lately to align derivatives regulation across borders, and Securities and Exchange Commission Chair Mary Jo White.

Federal Reserve Chair Janet Yellen is part of the council, but did not attend the closed meeting, which also covered proposed rules for insurance companies and a reevaluation of its determination that a nonbank financial company is “too big to fail.”

Yellen gave regularly scheduled testimony on Tuesday to the US Senate Banking Committee and told Congress that immediate risks, like the potential fallout from Britain’s June 23 vote on whether to leave the European Union, could darken the US economic outlook.

The council held an open meeting, as well, to discuss its annual report on the US financial system.

“Concerns related the upcoming United Kingdom referendum on exit from the EU, uncertainty in securing an agreement on Greece and ongoing geopolitical tension between Russia and Ukraine will likely weigh on sentiment in the coming months,” the report found, adding that immigration from “conflict-torn countries has also threatened European cohesion.”

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