London Daily

Focus on the big picture.
Monday, Feb 23, 2026

Bank of England governor warns EU demands for City are ‘unrealistic’

Bank of England governor warns EU demands for City are ‘unrealistic’

Andrew Bailey uses Mansion House speech to back government’s hardline stance for next round of Brexit talks
The governor of the Bank of England has called EU demands for City banks to comply with Brussels regulations unacceptable, in a combative speech backing the government’s hardline stance in the next round of Brexit talks.

Andrew Bailey said the UK should refuse to allow Brussels to restrict how the UK industry develops and look instead to global financial regulators as the main rule makers.

Calling the EU insistence on an equivalence regime out of line with all other deals signed by Brussels, the central bank head lined up with Boris Johnson as the UK embarks on what are expected to be difficult talks over the next few months.

Speaking online at the annual Mansion House dinner to finance industry executives, Bailey said the EU had granted equivalence status – a mutual recognition of each side’s regulatory standards – to Canada, the US, Australia, Hong Kong and Brazil based on their adherence to international regulations, but was insisting that London also track the twists and turns of EU rules.

“The EU has argued it must better understand how the UK intends to amend or alter the rules going forwards,” he said.

“This is a standard that the EU holds no other country to and would, I suspect, not agree to be held to itself. It is hard to see beyond one of two ways of interpreting this statement, neither of which stands up to much scrutiny.”

Bailey said the first interpretation was that the EU thought rules should never change, something that the governor said was “unrealistic, dangerous” and inconsistent with how the EU operated.

Instead, he favoured the interpretation that the EU would only grant equivalence status if the UK agreed to change its rules whenever the EU did. “But that is rule-taking, pure and simple. It is not acceptable when UK rules govern a system 10 times the size of the UK GDP and is not the test up to now to assess equivalence.”

During last year’s Brexit negotiations, the EU granted the UK’s financial services industry a six-month extension to the transition deal, which ended on 31 December.

City bosses are braced for ministers to reject a deal should the EU maintain its demand that the UK should not change its rules independently.

Bailey’s comments will bolster Johnson’s position in talks to seal a longer-term agreement, when the prime minister is expected to argue that Brussels is behaving unreasonably when it demands a commitment to amend City regulations in line with changes to EU rules.

Bailey said the UK should take a more global view of the City’s future and seek to be involved in global regulatory bodies. He said the central bank already provided the chairs for two of the four main regulatory bodies and this put the UK in a strong position to influence industry rules.

There was a message in Bailey’s speech for Brexiters who would prefer the UK to go it alone, with the governor warning that there would always need to be compromises to create a level playing field.

“It requires us to give up some control over our standards and rules, because the alternative of narrow domestic control is illusory – it would jeopardise achieving the very things we want, safe open markets, and likewise open economies. Above all, these bodies enable us to build the trust that enable our financial systems to stay open,” he said.

“But, we do not for a moment believe that we can maintain the arrangements we have without change. As the world around us changes, so too do we have to adapt how we achieve these public goods.

“Also, we do not participate in these global institutions with the intention to water them down, misguidedly because we think this would preserve some notion of our competitiveness as a nation. The UK could not be a global financial centre for long if we did.”

Bailey’s speech came as he found himself under pressure following a dispute over his handling of the London Capital & Finance (LC&F) collapse in his previous job as the main City regulator. Evidence he gave to MPs on Monday was questioned publicly the next day by the judge who headed an inquiry into LC&F, Dame Elizabeth Gloster.
Newsletter

Related Articles

0:00
0:00
Close
UK Police Officers Guarded 2010 Epstein Dinner Attended by Prince Andrew, Reports Say
US Trade Representative Affirms Commitment to Existing Tariff Agreements with UK and Other Partners
Activists at the Louvre hung a framed Reuters photograph of Andrew Mountbatten-Windsor slumped in the back of a car leaving a police station on the day of his arrest
The royal biographer said that he expected the police to 'look at the money trail' - including Sarah Ferguson borrowing money from Epstein
A Protestor screams in NYC: “Bill Gates is on the Epstein’s List…”
FBI and Secret Service Hold Press Conference After Shooting Incident at Mar-a-Lago
Mark Zuckerberg Testifies in Trial Over Social Media's Impact on Children's Mental Health
Maggie Oliver exposes Keir Starmer using letters to close child rapists investigations
Kouri Richie's wrote a children’s book to help her sons grieve the death of their father. Now she’ll stand trial for his murder
New York Braces for Major Snowstorm With Up to 18 Inches Forecast and Blizzard Warnings Issued
Mexican Military Kills CJNG Leader Nemesio Oseguera Cervantes as Violence Erupts Across Jalisco
Metropolitan Police Deploys Palantir-Powered AI to Flag Potential Officer Misconduct
UK Parliament Rebukes Police Over Ban on Israeli Football Fans
Britain Emerges Among a Small Group of Nations Without a Religious Majority
UK’s Manufacturing Base at Risk as Soaring Energy Costs Weigh on Industry
Matt Goodwin’s Unconventional Campaign for Reform UK in the Gorton and Denton By-Election
US Military Movements in the UK Spark Speculation Over Preparations Related to Iran Tensions
UK Faces Significant Economic Risk From Trump’s New Global Tariff Regime
UK Defence Secretary Signals Intent to Deploy British Troops to Ukraine
UK Students Mark Lunar New Year as Universities Adjust to New Equality Compliance Rules
UK Government Weighs Removing Prince Andrew from Line of Succession After Arrest
Prince Andrew’s Arrest in UK Rekindles Scrutiny Over US Handling of Epstein Records
Trump’s Strategic Warning to UK Over Chagos Islands Deal Sparks Diplomatic Whiplash
Starmer Government Postpones Local Elections Affecting 4.5 Million Voters
UK Economy Remains Fragile Despite Recent Upturn in Headline Indicators
UK Businesses Face Fresh Uncertainty Following US Tariff Ruling
Reform UK’s Senior Figures Face Scrutiny Over Remarks on Women and Family Policy
UK Electric Vehicle Drive Threatened by Shortage of 44,000 Qualified Technicians
University of Kentucky Trustees Advance Academic Reforms and Approve Coliseum Plaza Purchase
Boris Johnson Calls for Immediate Deployment of UK Troops to Support Ukraine
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
North Korea's capital experiences a significant construction boom with the development of a new city district dubbed 'Pyonghattan'.
New electric vehicle charging service eliminates waiting times
Vox Populi confronts Justin Trudeau at Davos over vaccination policies
Poland's President Karol Nawrocki ENDS support for Ukrainian citizens:
The mayor of Rotherham in Britain
One day after ex-Prince Andrew's arrest, British police are searching his former home, while U.K. lawmakers will consider introducing legislation to remove him from the line of royal succession
Vandana Shiva reminding the world that Bill Gates did not invent anything.
Italy's PM Giorgia Meloni highlights record employment and economic growth
UK Confirms Preferential U.S. Trading Terms Will Continue After Supreme Court Tariff Ruling
U.S. and U.K. to Hold Talks on Diego Garcia as Iran Objects to Potential Military Use
UK Officials Weigh Possible Changes to Prince Andrew’s Position in Line of Succession Amid Ongoing Scrutiny
British Police Probe Epstein’s UK Airport Links and Expand High-Profile Inquiries
The Impact of U.S. Sanctions on Cuba's Humanitarian Crisis: A Tightening Noose
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
British Co-founder of ASOS falls to his death from Pattaya apartment
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
×