FCA warns banks they will ‘act’ if politicians are wrongly denied services

A senior official at the Financial Conduct Authority (FCA) said the regulator will “step in” when financial institutions wrongly deny politicians or their families access to services.

FCA chief executive Sarah Pritchard wrote in the Telegraph that it is looking into whether financial institutions are “proportionate” in their risk assessments of politically exposed persons (PEPs).

Ms Pritchard said while it was necessary for those in power to seek more information than others about the sources of wealth, there had to be a “reasonable level of investigation”.

“(It) shouldn’t feel like the financial equivalent of someone going through your trash,” she said.

“We have heard that this is often the case, particularly with the families of political figures.

“If we find that banks and others are more control-oriented than risk-oriented, we will act. Because a proportionate additional financial control should not make participation in public life more difficult than necessary.”

In late June, former UK Independence Party leader Nigel Farage had his Coutts bank accounts closed, saying he was being denied accounts at other banks because of his political views.

This led to Dame Alison Rose, the CEO of NatWest, the company that owns Coutts, resigning from her post.

The scandal led to calls from the Treasury and Ministers for the FCA to conduct a review of whether financial institutions are complying with their guidance on how to deal with PEPs and whether those guidance need to be updated.

Ms Pritchard said the FCA is conducting a review that focuses on how “firms apply the definition of PEPs to individuals” and “reviews whether firms are proportionate in their risk assessments of UK PEPs”.

“It lays down that banks and others must be proportionate – with greater scrutiny of those who pose the greatest threat.” And we have made it clear that UK public figures should generally be considered low-risk,” said Ms Pritchard .

Ms Pritchard added that the objectives of the review are to keep the “system clean” but not to deny PEPs access to financial products and “services necessary for daily life”.

Russell Falcon

Russell Falcon is a USTimesPost U.S. News Reporter based in London. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. Russell Falcon joined USTimesPost in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing russellfalcon@ustimespost.com.

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