The governor of the Bank of England blocked a meeting that Rachel Reeves tried to secure with watchdogs and Revolut, amid concerns the chancellor was meddling in an independent process over the fintech’s UK banking licence.
Andrew Bailey intervened after learning of the plan to bring together representatives from Revolut, the Treasury and the Bank’s regulatory arm, the Prudential Regulation Authority, to discuss the fintech’s ambitions to become a fully authorised UK bank.
The three-way meeting, first reported by the Financial Times, had been due to take place in the past few weeks but was cancelled over concerns that the central bank’s regulatory decisions should be independent from government interventions and influence.
A Treasury spokesperson said: “The chancellor and the governor have a strong and productive relationship, and the government fully supports the operational independence of the Bank of England.”
The Bank declined to comment.
The meeting would have been part of the government’s charm offensive, with ministers desperate to convince Revolut – last estimated to be worth $45bn (£33.6bn) – to choose London for its much-awaited stock market debut primary listing.
Ministers have been spooked by comments from Revolut’s co-founder and chief executive, Nik Storonsky, who suggested last December that New York could be a better fit because of the regulatory environment and the size of the market.
Losing Revolut, which is Europe’s most valuable private fintech, would represent a major blow to the City and the London Stock Exchange, which has suffered from a growing number of defections, with companies snubbing the UK for listings abroad.
The chancellor has also been urging UK watchdogs to support financial firms in the name of growth, having gone so far as to claim in her Mansion House speech this month that regulation was acting as a “boot on the neck” of businesses.
Revolut secured a limited UK banking licence last year after a rare three-year wait, having had to convince regulators it had addressed a number of accounting issues and EU regulatory breaches, as well as reputational concerns, including about an overaggressive corporate culture. The fintech company says it has since resolved those accounting and regulatory problems, and has made efforts to improve its working culture.
However, the fintech was only granted a restricted licence and, 12 months on, has yet to have its application fully authorised.
The restrictions mean it cannot currently offer its own loans in the UK, and while it can hold customer deposits, they are capped at £50,000. Banks are usually put under these restrictions until they can prove they have appropriate staff, IT systems and governance and accountability checks in place to satisfy officials.
Revolut has been hoping to gain full approval from UK regulators this year. A fully fledged licence would open the door to new income streams, allowing it to start funding own-branded loans and mortgages.
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It would also mean it would face stricter regulations and make it part of the compensation scheme.
A full licence was expected to be the first step in opening the door to banking licences in other countries, including the US. Revolut has already secured an EU banking licence through Lithuania.
In the absence of UK approval, it has emerged that Revolut is considering buying an American bank in order to secure an American banking licence and accelerate its expansion stateside.
The fintech company originally launched as a prepaid card focused on free currency exchange for customers. It has since grown to more than 10,000 staff, serving customers in more than 36 countries, with more than 50 products and services. As well as money transfers, it offers home rentals, buy now, pay later credit, wage advances, e-sims for mobile data plans and crypto trading.
Its annual report in April showed Revolut more than doubled its annual profits in 2024, jumping almost 150% to £1bn, thanks to a rise in subscriptions, and revenues from its wealth and crypto trading divisions.