Policymakers in the U.K. and Europe are holding uncertainty in their hands after Britons voted to leave the EU, International Monetary Fund Managing Director Christine Lagarde said Sunday.
In the referendum held on June 23, 52 percent Britons voted to leave the EU after 43 years of membership. UK Prime Minister David Cameron announced his resignation on Friday.
The outcome of 'Brexit' will depend on how policymakers deal with the situation, she said at the Aspen Ideas Festival in Colorado. "How they come out in the next few days is going to really drive the direction in which risk will go."
"We have strongly encouraged the parties involved to actually proceed with this transition in the most efficient, predictable way in order to reduce the level of uncertainty which will in itself determine the level of risk we are facing," Lagarde said.
Policymakers are going to be in high demand to come in the most cohesive, concerted and hopefully positive way in response to the situation, she noted.
Further she observed that the 'Brexit' triggered volatility in the market. "But there was no panic and the central bankers did the job that they were prepared to do just in case."
Lagarde last week urged the authorities in the U.K. and Europe to work collaboratively to ensure a smooth transition to a new economic relationship between the U.K. and the EU.
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