The European Commission and EU regulators must urgently clarify how they intend to avoid “significant market disruption” if no agreement is reached in Brexit talks, an influential industry body has warned.

The Association of Financial Markets in Europe, which represents the interests of around 40 of the largest banks in Europe and the UK, has written to the European Commission’s vice-president for financial stability Valdis Dombrovskis to stress the “urgent need” for steps to avoid market disruption.