Pressure mounts on UK financial regulator to overhaul bank rules for politicians


Share post:

Receive free UK financial regulation updates

Pressure is mounting on the UK’s financial regulator to overhaul the rules governing bank accounts for politicians and their families, after a cabinet minister and the leader of a political party raised fresh concerns.

Grant Shapps, the energy security secretary, said this weekend that he, his wife and two sons had all faced difficulties “in getting an account”.

Shapps made the comments in the wake of a furore over the closure of Nigel Farage’s bank account at Coutts, in part because of the former Ukips leader’s political views. The fallout has led to the resignation of both the chief executive of Coutts and its parent company NatWest.

The Financial Conduct Authority is reviewing the strict regime that governs the bank accounts of so-called politically exposed persons (PEPs), which aims to stamp out corruption and bribery but has been criticised for curbing politicians’ access to banking services.

HSBC recently asked Shapps’s 19-year-old son for swaths of documentation, including explanations of the source of his wealth, in “a list as long as his arm”, the Tory minister told the Sun on Sunday newspaper. He said the request was “completely unreasonable”.

He also said that his other son, aged 22, had been “outright refused” an account by a challenger bank, which he did not name.

His intervention followed claims in The Sunday Times that the political party led by prominent Brexiter Richard Tice might also have had its account closed.

Richard Tice, a prominent Brexiter, said the bank account of Reform UK, successor to the Brexit party, had been closed © Vickie Flores/EPA/Shutterstock

Tice told the Financial Times that in the summer of 2021 Metro bank closed the account of Reform UK, the populist rightwing party previously known as the Brexit party.

He also said that, earlier this year, American Express, with whom he had banked for 35 years, requested a lot of new documentation from him. Complications in submitting the paperwork led to his account being suspended for six weeks, he said.

In addition, Tice said last summer that Tide bank had closed the account of a small business he ran.

Suspecting his political views prompted these moves, he has entered so-called subject access requests to each of the three banks, seeking internal documents setting out the reasons for their decisions.

However, he acknowledged that a zealous, or overzealous, application of existing PEP rules may explain the banks’ moves, arguing the regime requires “fundamental” reform.

He said: “The definition of a PEP has been so widely drawn, including grandchildren of people, for heaven’s sake . . . The whole idea of the PEP regime was not to make it harder for people that try and get involved in shaping and influencing politics in the UK. It was people who might actually be exposed to manipulation outside.”

Andrew Griffith, Treasury minister, has been the most vocal politician calling for reforms to banks’ procedures for closing accounts and overhauling the PEPs regime. A day after NatWest CEO Dame Alison Rose resigned in the fallout surrounding Farage’s bank closure, Griffith convened the country’s top bank executives to demand changes, including that lenders triple the notice period of terminations to 90 days to allow more time for an appeal and that clearer explanations for closures be given.

Separately, earlier this month Griffith wrote to the FCA to urge the regulator to speed up its review into how PEPs are treated. Politically linked clients are subject to more stringent requirements because they are seen to be at a higher risk of bribery and corruption.

In June, the government relaxed the rules to reduce the due diligence requirements for domestic PEPs compared to those based overseas.

Farage announced over the weekend that he was launching a website to help people denied bank accounts.

Spokespeople for HSBC, Metro Bank and Tide all declined to comment on any individual client. Amex did not immediately respond to a request for comment outside normal working hours.

Source link

Lisa Holden
Lisa Holden
Lisa Holden is a news writer for LinkDaddy News. She writes health, sport, tech, and more. Some of her favorite topics include the latest trends in fitness and wellness, the best ways to use technology to improve your life, and the latest developments in medical research.

Recent posts

Related articles

UK regulator to launch review of private market valuations

Receive free UK financial regulation updatesWe’ll send you a myFT Daily Digest email rounding up the latest...

European and Asian stocks rise on improved China industrial data

Receive free Markets updatesWe’ll send you a myFT Daily Digest email rounding up the latest Markets news...

UK regulators approve plans for new Rosebank North Sea oilfield

Receive free UK energy updatesWe’ll send you a myFT Daily Digest email rounding up the latest UK...

London mayoral hopeful Susan Hall: ‘I am marmite’

Susan Hall is the low profile Conservative London Assembly member battling for one of the most prominent...

Amazon & the FTC

This article is an on-site version of our Unhedged newsletter. Sign up here to get the newsletter...

Scotland recycling failure doubles National Investment Bank losses

Receive free Scotland updatesWe’ll send you a myFT Daily Digest email rounding up the latest Scotland news...

PwC Australia’s culture attacked in tax leak scandal report

Receive free PwC updatesWe’ll send you a myFT Daily Digest email rounding up the latest PwC news...

US Senate reaches deal to avoid government shutdown

What to watch in Asia todayGeorge Russell in Hong KongCapital markets: Dubai Financial Market, a United Arab...