Mark Carney is set to warn Brussels that the European financial system faces a shock unless policymakers give institutions more time to adapt to trading arrangements after Brexit.

In his capacity as vice-chairman of the European Systemic Risk Board (ESRB), Mr Carney is expected to stress to the European Commission and the heads of top EU financial services bodies next month that a transition agreement is in the interest of the EU as much as it is for the UK.

The Governor of the Bank of England has used meetings with British bankers to call for temporary continuity of current arrangements after negotiations are concluded, in what some claim is an attempt by Mr Carney to keep the UK inside the single market of goods and services until at least 2021.