OFR: U.S. Financial Stability Faces Threat From Brexit

The Office of Financial Research (OFR) has released an assessment of how the Brexit vote has raised the threat level of U.S. financial stability, according to a recent Financial Times article.

“The result of the U.K. referendum surprised financial markets and was a negative shock to investor confidence. It introduces months or years of uncertainty about the rules governing the U.K.’s investment, financing, and trade relations with Europe and the rest of the world,” OFR Director Richard Berner said in a statement.

The OFR has highlighted the dangers posed by the aftermath of Brexit. “Larger shocks to confidence are possible as those deliberations and negotiations play out,” Mr. Berner said. “Because the U.K. economy and especially the U.K. financial system are highly connected with the rest of Europe and the United States, severe adverse outcomes in the U.K. and spillovers to Europe could pose a risk to U.S. financial stability.”

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