But there was a risk that similar disruptive episodes in the future could cause longer-lasting damage to the financial system, its executive director for markets Chris Salmon said. But Salmon said the BoE's "headline conclusion" that no further action was required now should be tempered as future "flash episodes" could ripple further. A future flash episode could coincide with benchmark fixings in foreign exchange markets, or a margin call related to equity or derivative markets. "The resulting impact on the recorded values of a range of assets might risk mechanically prompting further sales and price falls." However, no risk is "flashing red that requires an immediate response", he said.

Source: Times of India October 06, 2017 09:45 UTC