Mario Draghi  said the European Central Bank has plans in place in case this week’s UK referendum on its European Union membership sparks turmoil that threatens the outlook for the euro region.
At a hearing of European lawmakers in Brussels, Draghi said policymakers “stand ready” to act if price stability is threatened and highlighted the Brexit vote as a potential risk.
“In particular, the ECB is ready for all contingencies following the UK’s EU referendum,” he said in his opening remarks to the European Parliament.
Responding to questions, he said it’s “very difficult” to foresee the various ways that the vote could impact markets and euro-area economies, but “we’ve done all the preparations that are necessary now.”
With just one day to go before the referendum - which could see Britain withdraw from the world’s largest single market - central bankers are putting the defences in place to shore up market confidence and the financial system if that happens. With polls showing the result too close to call, officials stand ready to pump liquidity into banks if funding dries up and to push back against capital flight from sterling. In Washington, Federal Reserve chair Janet Yellen included the UK vote as one of several potential international threats to the US economy. The Fed last week cited the referendum as a factor when it kept interest rates steady. Pages 3, 4, 5, 13, 14