UPDATE 1-No-deal Brexit would cause market disruptions, may effect liquidity- EU's Dombrovskis

A no-deal Brexit would cause market disruptions and might also have an impact on liquidity in financial markets, the EU commissioner in charge of financial services Valdis Dombrovskis said on Tuesday.

Dombrovskis said the EU had adopted a series a contingency measures to deal with a hard Brexit, a situation in which Britain would leave the EU without a deal, but admitted: "We will not be able to mitigate all possible negative economic effects." "There is going to be disruption. There may be effects on liquidity," Dombrovskis told a hearing in the European Parliament, adding that there was a "material risk" that Britain will leave the EU on April 12 without a divorce deal.

The Bank of England and European Central Bank have said they stand ready to provide liquidity if a no deal Brexit risked freezing markets. Dombrovskis reiterated his calls on banks and other financial operators to prepare for a no-deal Brexit so that they could adapt to that scenario if it eventually happened. Britain's prime minister, Theresa May, was chairing a cabinet meeting on Tuesday after parliament failed again on Monday evening to agree on a way forward. More parliamentary votes on Brexit options are likely this week.