Lenders to be asked to seek approval before relocating to EU

The Bank of England is expected to start asking lenders to seek its approval before moving any jobs or operations to the European Union.

According to a report in the Financial Times, the central bank has become concerned that European regulators are asking for more to move than is necessary for financial stability after Brexit.

Governor Andrew Bailey (pictured) reportedly took a personal interest in the issue after learning about several requests from the European Central Bank that were considered to be excessive.

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Bailey has been openly critical about the way in which the EU has approached the regulation of UK financial services post-Brexit.

At a Treasury Select Committee last month, Bailey told MPs that he was concerned that the EU may exert regulatory pressure on EU-based financial firms in an effort to get them to shift their activity out of London and into the EU.

“Frankly, it would be a serious escalation of the issue,” said Bailey, and suggested such pressure would be of “dubious legality”.

“I have to say to you that would be highly controversial – and that would be something that we would have to, and want to, resist very firmly,” he added.

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The UK and EU have been in discussions about the future of cross-Channel financial services since the UK left the EU on 1 January this year.

Last week, representatives from both jurisdictions agreed the terms for a preliminary agreement on the future of financial services co-operation. It is expected that the agreement would grant equivalence to UK firms, which means that the EU would recognise UK financial rules as equivalent to its own and vice versa.

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