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Frankfurt - The European Central Bank said on Friday it was on stand-by to open the liquidity floodgates should it become necessary in the meltdown sparked by Britain's decision to quit the European Union.
"Following the outcome of the UK referendum, the European Central Bank is closely monitoring financial markets and is in close contact with other central banks," it said.
Banking system
"The ECB stands ready to provide additional liquidity, if needed, in euro and foreign currencies," the bank said.
"The ECB has prepared for this contingency in close contact with the banks that it supervises and considers that the euro area banking system is resilient in terms of capital and liquidity," it added.
The pound collapsed and world stock markets descended into pandemonium in reaction to the outcome of the Brexit referendum, fuelling a wave of global uncertainty.
Sterling hit a 31-year low, crashing 10% to $1.3229 at one point, and the euro also plummeted against the US currency as the Brexit result caught markets by surprise.
European stock markets went into free fall at the opening, mirroring a rout in Asian markets, which were still open as the referendum results trickled in.
The ECB said it would "continue to fulfil its responsibilities to ensure price stability and financial stability in the euro area."
Separately, the ECB revealed that banks had taken out nearly €400bn in ultra-cheap loans from the central bank as they steeled themselves for financial turbulence in wake of the referendum outcome.
Borrowed money
The central bank said that 514 banks had borrowed €399.3bn in four-year loans at a rate of zero percent under its so-called targeted long-term refinancing operations or TLTRO scheme.
The banks are obliged to lend on the borrowed money to companies and businesses, as the continued weakness of credit activity is seen as one of the key factors in the still very tentative economic recovery in the 19 countries that share the euro.
A first version of the scheme was originally launched in September 2014.
But the ECB has decided to launch a second new round, comprising this time of four TLTROs in all, each with a maturity of four years, where banks can borrow at even more competitive rates.
