Fed, Group of 7 monitoring markets after Brexit vote

The Federal Reserve and the Group of 7 are keeping a close eye on financial markets after Britain’s stunning vote to exit the European Union.

The central bank and G-7 ministers from the United States, United Kingdom, Canada, France, Germany, Italy and Japan each said they will consult market developments and financial stability after Thursday’s Brexit vote sent shockwaves through global stock exchanges on Friday. 

{mosads}The Dow Jones Industrial fell nearly 500 points after Friday’s opening.  

The Fed said it was “carefully monitoring developments in global financial markets” and is prepared to lend a hand to its counterparts abroad if necessary. The Fed also noted that the drama that comes with the unprecedented exit could effect the U.S. economy.

“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 statement read.

The G-7 ministers said they respect “the intention expressed today by the people of the United Kingdom to exit from the European Union.”

“We affirm our assessment that the U.K. economy and financial sector remain resilient and are confident that the U.K. authorities are well-positioned to address the consequences of the referendum outcome,” the G-7 ministers said in a statement.

The ministers said that G-7 central banks “have taken steps to ensure adequate liquidity and to support the functioning of markets. We stand ready to use the established liquidity instruments to that end.”

In a separate statement, Treasury Secretary Jack Lew said “the people of the United Kingdom have spoken and we respect their decision.”

“We will work closely with both London and Brussels and our international partners to ensure continued economic stability, security, and prosperity in Europe and beyond,” Lew said.

“I have been in regular contact in recent weeks with my counterparts and financial market participants in the U.K., EU and globally and we are continuing to consult closely,” he said.  

“The U.K. and other policymakers have the tools necessary to support financial stability, which is key to economic growth.”

 This post was updated at 9:45 a.m.