The Great Unbanking
Brexiteer Nigel Farage’s recent claim that he had been designated a “politically exposed person” and blacklisted by financial institutions, if true, represents a dangerous violation of people’s rights. This unchecked overreach, driven by regulatory zeal, is neither rational nor prudent.
LONDON – Nigel Farage, the former leader of the UK Independence Party (UKIP) and the driving force behind the campaign for the United Kingdom’s exit from the European Union, recently caused an uproar when he revealed that his bank accounts were closed two months earlier, allegedly because of his political views.
Farage claimed that he tried to open new accounts with seven other banks, all of which turned him down. His original bank, Coutts – a subsidiary of NatWest that caters to an ultra-wealthy clientele – later stated that the decision to shut down his account was purely commercial and that Farage simply fell below the bank’s wealth threshold.
But Farage maintained that he had been blacklisted. He suggested that he had been labeled a “politically exposed person” (PEP), a designation he attributed to unfounded accusations that he had received payments from the Russian government, and claimed that members of his family were affected by this designation. Farage’s accusations immediately triggered a political backlash. The UK Treasury announced a review of whether existing regulations strike the “right balance between the rights of a customer to express themselves freely and the right of the bank to manage commercial risk.”