The International Monetary Fund (IMF) warned that Brexit is one of the biggest risks for global financial stability.

As part of its new Global Financial Stability Report, the IMF said on Wednesday that financial institutions have to “step up their preparations for a post-Brexit landscape” and prepare for the worst case scenario — a no-deal Brexit, also known as a hard Brexit.

This type of disorderly Brexit is where the UK crashes out of the European Union without any agreements in place. That would throw into question the rules surrounding cross-border trade, immigration, and financial services. The IMF said that financial institutions need to look at measures for a no-deal Brexit “in as much detail as possible.”

The two-yearly IMF report is one of the most comprehensive reviews it has carried out since the 2008 crash and is a health assessment of the financial system. The group recently downgraded global growth forecasts.

The IMF said that a disorderly Brexit could also “adversely affect market sentiment” and this kind of pressure could set off “sharp tightening of global financial conditions.” A no-deal Brexit is also tipped to spark European financial market fragmentation, meaning that money cannot flow around the system efficiently.

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