As the U.K. agonizes over its relationship with Europe, the Bank of England is readying for turmoil.
With just 10 days before a referendum that could see Britain withdraw from the European Union, central bankers are putting the defenses in place to shore up market confidence and the financial system if that happens. Tuesday will see the first test of its work, with the start of a series of extra market operations to boost liquidity around the vote.
The culmination of more than a year of planning may see Governor Mark Carney face down a plethora of challenges from the potentially historic event. With volatility already spiking and the result set to be announced on a normal trading day, the immediate consequences of a Brexit victory could include capital flight, a sterling slump and a drying up of bank funding.
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Craig Erlam
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