Banks to face ‘very serious consequences’ if they lie on ‘debanking’, FCA chief warns
Banks will face “very serious consequences” if they are found to have lied about cases of so-called “debanking,” the City watchdog’s chief warned today, as the fallout from a row between Nigel Farage and Natwest earlier this year continued.
The chief executive of the Financial Conduct Authority (FCA), Nikhil Rathi, added that senior managers would face strict punishments if they broke “integrity rules”.
“It is a very serious issue if a senior manager of a bank knowingly and intentionally gives the regulator incorrect information. [It would] breach the SMR (senior manager’s regime) [and] it breaches principal eleven on transparency of cooperation,” Rathi told the Treasury Select Committee on Tuesday.
“We have taken very firm action against a former chief executive of a large bank because of breaches of the integrity rules,” he added. “So if that does come out… there’ll be some very serious consequences for the senior managers involved.”
Dame Alison Rose, former chief executive of Natwest, resigned in July after admitting to discussing former Ukip leader Nigel Farage’s Coutts account with the BBC.
The Brexiteer claimed his account was unfairly closed due to his political views and has recently stated plans to mount legal action against Natwest.
Chancellor Jeremy Hunt has described the issue of “debanking,” which also led to the resignation of the boss of Coutts, as a “threat” to free speech.
The regulator was tasked with investigating the issue following the Natwest scandal but has so far found no evidence of systemic politically-motivated debanking in the UK.
It found that inactivity or concerns about financial crime were the primary reasons for account closures.
Four accounts at UK banks were closed due for political reasons, although further investigation showed that three of these closures were due to customer behaviour, which included racist language, rather than political opinion.
Rathi also warned the Treasury of “policy overload” earlier today, as the government pushes through reforms to the rules governing the financial services sector.