The UK’s Financial Conduct Authority (FCA) is calling on politicians to report any difficulties they encounter while trying to open or maintain bank accounts ahead of a formal investigation into “debanking.” This review is part of a broader examination of how financial services firms have applied the Politically Exposed Persons (PEP) regime, which subjects politicians, their families, and close associates to stricter checks due to their potential susceptibility to bribery and corruption.
The FCA’s move comes after former Brexit Party leader Nigel Farage claimed that his account at private bank Coutts, part of NatWest, was closed because of his political views. The regulator is interested in gathering early evidence before publishing the full terms of reference for the review in September, with a report expected in June of the following year.
The review is separate from an urgent data-gathering exercise into the scale of debanking, which is being conducted by the UK’s finance minister, Jeremy Wright, who has suggested that lenders involved in widespread and unjustified debanking should face fines. The results of this data exercise are due by mid-September.
The PEP rules were developed by the Financial Action Task Force (FATF) on money laundering, and the FCA issued guidance on their application in 2017. The review reflects growing concerns about how banks handle the accounts of politicians and politically exposed individuals.
By FCCT Editorial Team
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