US Treasury's Lew sees no financial crisis from 'Brexit'

[WASHINGTON] US Treasury Secretary Jack Lew on Monday said he sees no signs of a financial crisis arising from Britain's decision last week to leave the European Union, although the result does present additional "headwinds"for the US economy.

"It's been an orderly impact so far," Mr Lew said in an interview on CNBC.

Mr Lew said he expects a transition period as parties work through the ramifications of the June 23 referendum, in which Britons voted by a 52 per cent to 48 per cent margin to withdraw from the EU.

"Responsible parties will work through this," Mr Lew said, adding he expected to see a fairly long period of change and that governments must focus on promoting growth.

The referendum outcome roiled global markets, triggering a US$2.08 trillion sell off in global stock markets on Friday, the largest one-day loss in stock market value ever. US stocks fell by more than 3 per cent, and investors piled into safe assets such as US Treasury securities, driving already meager bond yields lower.

The selling was continuing on Monday morning, with US equity index futures pointing to a decline of about 1 per cent for Wall Street.

Still, Mr Lew said he sees the US economy weathering the situation, even as the referendum result presents "an additional headwind."

"The US economy is doing pretty well," Mr Lew said.

REUTERS

For more coverage of the EU referendum, visit bt.sg/BrexiT