A brewing conflict is unfolding in British financial regulation, pitting Bank of England Governor Andrew Bailey against Chancellor Rachel Reeves. Bailey has blocked a meeting Reeves sought to arrange between regulators and fintech giant Revolut, signaling a sharp divide over the company’s banking license process.
Revolut, which boasts 11 million customers in the UK, has been in a “mobilization” phase for over a year following preliminary approval of its banking license. Currently, the company is limited to accepting deposits of up to £50,000, hampering its growth potential. Reeves appears eager to expedite the process, reflecting her broader push to liberalize financial regulation and revitalize a sector that has stagnated for three years under tight oversight.
However, Bailey’s stance suggests a firm boundary between political influence and regulatory independence. Sources indicate he was “genuinely furious” over Reeves’ remarks likening regulation to a “boot on the throat of business.” This clash highlights a growing tension as the new chancellor aggressively seeks to reshape the financial landscape, while regulators aim to preserve their autonomy.
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The outcome could be intriguing. Frustrated by delays, Revolut might opt to pursue an initial public offering (IPO) in the US instead, potentially shifting its financial future across the Atlantic. As the standoff continues, the balance between innovation and oversight in the UK’s financial sector hangs in the balance.
