The governor of the Bank of England has reportedly blocked a meeting planned by Chancellor Rachel Reeves to address the regulation of Revolut, in a sign of potential friction between the Government and the central bank.
The Chancellor had sought to set up a three-way meeting for Treasury officials, the fintech business and the Bank of England’s Prudential Regulation Authority, with regulates UK banks.
It is understood the Chancellor is pushing for Revolut to be fully authorised as a bank as soon as possible, after receiving initial approval last year.
However, the Financial Times reported the meeting was scrapped by Governor Andrew Bailey due to concerns of political interference in the central bank’s oversight process.
The incident, which took place in recent weeks according to the publication, contributes to speculation of a growing rift between the Treasury and regulators.
Ms Reeves is currently pushing forward with reforms designed to loosen the rules on financial firms, in a move which will increase risk-taking in the sector.
The “Leeds reforms”, unveiled in the West Yorkshire city earlier this month, are set to be the biggest set of changes to financial services for more than a decade, according to the Government.
Labour is hoping that cutting red tape in the financial services sector and other industries can help accelerate growth in the economy.
In her annual Mansion House speech to the financial services sector earlier this month, she urged regulators to resist “excessive caution”.
She added: “In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth.”
Shortly after the meeting, Mr Bailey said “I don’t use those terms” when asked about Ms Reeves’s remarks on regulation.
He also said: “We cannot compromise on basic financial stability, that would be my overall message.”
Last year Revolut was approved for a UK banking licence after a lengthy process with regulators, however its banking division still has a limit on deposits it can receive until it receives full approval from regulators.
The Bank of England declined to comment. The Treasury has been contacted for comment.
