Banks working on plans after Brexit have been warned by the European Central Bank (ECB) that they will "need to have substance locally" to serve European clients.
The ECB said some of the proposals it has reviewed are inadequate and risked creating "empty shells".
Many major banks have European headquarters in London, and gain access to the European market through UK offices. They have said they are working on contingency plans, adding space in cities such as Frankfurt and Dublin.
The Bank of England has said it is braced for the potential loss of 75,000 finance jobs following Britain's departure from the European Union. However, details of how Britain will divorce from the rest of the European Union are still unclear, and some banks have been hoping that the break will not as disruptive as originally thought.
The ECB said finance firms must have local trading abilities and local risk committees, among other requirements.
"ECB Banking Supervision appreciates the progress banks have made in their Brexit preparations," it said in its autumn newsletter. "However, some elements in a number of banks' plans do not fully meet the ECB's expectations and requirements of banks operating in the euro area."