Voting to leave the European Union is the "biggest domestic risk" to Britain's financial stability and could affect the housing market and financial services, the governor of the Bank of England said on Tuesday.
A British exit from the EU, or Brexit, could also prompt some companies to relocate head offices from Britain, Mark Carney told a parliamentary committee, stressing that the bank would not campaign for an "in" vote or an "out" vote in a referendum on June 23.
"It (Brexit) is the biggest domestic risk to financial stability," Carney said, but he added that global risks to Britain's financial stability, "including from China, are bigger than the domestic risks."
He said that although he saw a "positive impact of EU membership," there could be a "potential reduction in financial stability" even if voters opt to remain part of the EU.
The Bank of England said on Monday that it plans to inject more cash into markets to improve liquidity around the time of the referendum, in case of a run on banks.
It will offer three additional Indexed Long-Term Repo (ILTR) operations under a scheme enabling banks to bid to borrow cash from central bank reserves against collateral.
Prime Minister David Cameron has urged people to vote for remaining part of the EU after he negotiated a deal for reforms that would give Britain a "special status."