BoE's Woods urges banks to build 'disorderly Brexit' cash reserves

At the Mansion House City Banquet, Woods said the Bank of England has been working with firms "to ensure they have in place liquidity sufficient to accommodate a severe dislocation in financial markets".

Woods added that firms are expected "to be resilient against a wide range of scenarios, but not against Armageddon".

Continuing to outline the Bank's Brexit plans, he noted that Parliament has been asked to approve the Temporary Permissions Regime, which will bridge incoming EU27 firms for three years while they seek authorisation to continue business in the UK.

Woods said all firms are encouraged to opt into the regime because it will provide certainty until March 2022 and is a "straightforward, common sense way of lowering the risk of disruption to the City of London".

Additionally, he noted the Bank's efforts to avoid disruption to financial contracts.

To allow for those firms exiting the UK to wind down their operations, the UK government is drafting temporary recognition and run-off regimes so that contracts written before Brexit can still be appropriately cleared and serviced after it.

Woods concluded: "I strongly urge colleagues in the EU27 to take similar steps. I see no tension on this issue between the interests of regulators and firms – we all want to reduce the risk of disruption."