LONDON, Jan 7 (Reuters) - Financial markets are likely to be hit more frequently by the kind of upheaval unleashed by the COVID-19 pandemic and central banks need new tools to deal with powerful investment firms which were at the heart of it, a Bank of England official said. “Last year’s COVID ‘dash for cash’ was a wake-up call as to the scale and urgency of this work,” Andrew Hauser, the BoE’s executive director for markets, said in a speech hosted by Reuters. Non-bank companies, which include pension managers, money market funds and hedge funds, now account for about half of the world’s financial assets. They have helped savers and businesses as banks were in reined in by reforms after their risk-taking brought about the 2007-09 financial crisis. But the non-banks failed to withstand the coronavirus shock last March and reforms are needed to prevent future liquidity problems from threatening the economy, Hauser said. Central banks should consider a formal role as “market makers of last resort” - trading securities at times of financial panic - in return for tougher regulation of financial businesses other than banks, he said. This would mirror the role of “lender of last resort” which the BoE provides to the heavily regulated banking sector. (Editing by David Milliken)