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Australia can weather Brexit storm: govt

NZ NewswireNZ Newswire 25/06/2016 Belinda Merhab

Australia's financial system is strong enough to weather the Brexit storm, but a vote for the coalition on July 2 is crucial to make sure it stays that way, Treasurer Scott Morrison insists.

Britain's shock decision on Friday to leave the European Union has rippled around the world, impacting heavily on financial markets.

The Australian sharemarket and dollar took a hit while the pound suffered its biggest one-day fall in history.

Mr Morrison said he had since spoken with Treasury, the Reserve Bank and the Australian Prudential Regulation Authority as well as the chief executives of Australia's major banks, all of whom have large businesses in New Zealand.

Australia was well placed and well prepared for the situation.

"That is not by accident," he told reporters in Sydney.

Prime Minister Malcolm Turnbull and Mr Morrison held a joint press conference on Saturday urging voters to back the coalition's plan for the economy at next week's election, warning uncertainty would remain for years as the terms of the UK's departure were finalised.

"Markets can never have certainty soon enough but the Australian people can have certainty next Saturday," Mr Morrison said.

Mr Morrison said banks in Australia and overseas had been well prepared for the highly anticipated referendum while regulators at home and abroad had taken necessary precautions to stress-test financial institutions, he said.

"It is important that we take every opportunity to remind Australians and to remind those further afield of the strength of Australia's banking and financial system."

Mr Morrison said short-term volatility on global markets would moderate over the week, pointing out the reaction in Australia's largest trading partners of China and the US had been far more modest.

Mr Turnbull said negotiations with the EU for a free-trade agreement would continue, insisting Australia had very strong relations with all EU nations particularly its largest and third-largest economies of Germany and France.

He had no doubt Australia would negotiate trade agreements with a separated Britain but said it would be complex.

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