Bank of England governor Andrew Bailey has reportedly intervened to stop a meeting that chancellor Rachel Reeves had tried to arrange with financial watchdogs and Revolut, highlighting growing tensions over regulatory independence, according to the Financial Times.

Reeves had attempted to set up a three-way meeting involving Treasury officials, the FinTech company and the Bank of England's Prudential Regulation Authority, which supervises banks and is headed by Sam Woods. The meeting was intended to discuss Revolut's ambitions to become a fully authorised UK bank.

However, Bailey cancelled the meeting over concerns that bank regulation should remain independent from political interventions, according to people familiar with the matter cited by the Financial Times. The events took place in recent weeks.

The clash comes as Revolut continues to face delays in securing full banking authorisation. While the company's application for a banking licence was approved last year after a three-year process, it remains in a "mobilisation" stage during which its banking division can accept total deposits of just £50,000 while building out controls and infrastructure.

The Prudential Regulation Authority had previously indicated it hoped for this phase to end after 12 months, but that deadline passed on 25 July, as reported by City AM. Both Revolut and the PRA have said this is not a firm deadline and the mobilisation period could take longer for various reasons.

The dispute reflects broader tensions between Reeves and Bailey over financial regulation. Last week, Bailey publicly signalled his frustration with some of the chancellor's efforts to streamline City regulation, including warning against going too far in reforming ringfencing rules that force UK banks to separate retail and investment banking activities.

"It has established itself as part of the system and to me it would not be sensible to take it away at this point," Bailey told MPs, referring to rules introduced after the 2008 financial crash. "We can't compromise on basic financial stability."

Bailey also distanced himself from comments Reeves made in her Mansion House speech describing some regulation as "a boot on the neck of business". "I don't use those terms - let me say that," Bailey said.

One colleague of Bailey said he had been "really pissed off" by Reeves' comments about "boots on necks", the Financial Times reported, though the chancellor's team insisted that personal relations were very good.

The £65 billion privately held Revolut, which has nearly 11 million customers in the UK and more than 50 million worldwide, is currently considering where to list when it goes public. The Financial Times has previously reported the company would favour a New York listing.

Revolut co-founder Nik Storonsky said in 2023 that he did not "see the point" of listing in London due to the UK's regulatory regime.

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."

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