Rishi Sunak’s government urged the UK financial regulator to step up its review into how banks treat customers who are also politicians, after a series of complaints from right-wing figures about their treatment.
(Bloomberg) — Rishi Sunak’s government urged the UK financial regulator to step up its review into how banks treat customers who are also politicians, after a series of complaints from right-wing figures about their treatment.
Banks “should not be closing individuals’ accounts solely due to their status” as a political figure, City minister Andrew Griffith said in a letter to the FCA published Wednesday. It comes after former Brexit Party leader Nigel Farage said private bank Coutts closed his account due to his status as a “politically exposed person” — though he also accused it of punishing him for his views.
The FCA didn’t immediately respond to a request for comment.
Read More: UK Orders Review of Bank Rules on Politicians After Farage Blast
Ministers legislated last month to reduce the due diligence burden on domestic PEPs compared to those based overseas, after criticism that the law was having unintended consequences. The rules were originally introduced because political figures are seen as being at higher risk of bribery or corruption, as well as to mitigate money-laundering risks.
But Farage’s allegation that he was victim of “serious political persecution” and “prejudice” due to his role campaigning for Brexit taps into a growing movement in British right-wing politics that freedom of speech is being impeded. It’s a political constituency that some senior Conservatives, including members of Sunak’s government, try to leverage in a broader “culture war.”
Still, Farage’s claims were undermined when the BBC reported that Farage’s account at Coutts, which caters to high-net-worth customers, was closed because he fell below the required threshold. Farage then told the BBC Coutts hadn’t had a problem with that for the past 10 years.
The government’s response reflects the political dynamic in play. Though ministers have not accepted Farage’s allegations in full, they have also taken care to try not to anger voters sympathetic to the Brexit campaigner who the Tories need to keep onside with a general election expected next year.
“It is crucial that an appropriate balance is struck and that these measures do not unduly burden or prevent democratically elected individuals, public officials, or their respective families from access to essential banking services,” Griffith wrote of the PEP rules. “Some financial institutions may be failing to strike the right balance of taking a proportionate approach based on a careful evaluation of the actual risk.”
(Updates with attempt to get comment from FCA in third paragraph.)
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