The European Union's top banking sector supervisor has warned national regulators against competing with each other by either relaxing or tightening their standards while negotiations over the UK's exit from the bloc are ongoing.

In an opinion paper addressed to European and national regulators published on Thursday on issues related to Brexit, the European Banking Authority said the "unprecedented situation" of Brexit and the possibility of UK-based finance firms looking to relocate to EU bases had prompted the regulator to issue guidance.