Jeremy Hunt has been pressed to scrutinize the banking regulator in an attempt to “restore integrity” following the de-banking scandal.
Several high-profile Conservatives and ex-finance industry leaders have written to the Chancellor expressing worries that the Financial Conduct Authority (FCA) may have unintentionally fostered the banking culture leading to Nigel Farage’s loss of his Coutts account.
The authors include Iain Duncan Smith, former leader of the Conservative Party, Danny Kruger, a Tory MP serving on the Commons Treasury Committee, Prof Daniel Hodson, ex-deputy CEO of Nationwide Building Society, and Baroness Noakes, a former president of the Institute of Chartered Accountants in England and Wales and a non-executive director at the Bank of England.
The letter, a copy of which was shared with The Telegraph, raises questions about the FCA’s strategy and its possible unintended outcomes.
The authors highlight the FCA’s promotion of “environmental, social, and governance” (ESG), a policy urging companies to act responsibly.
They also refer to an FCA source mentioned in The Guardian article expressing “a real sense of unease” within the regulator following the resignation of Dame Alison Rose.
Dame Alison left her position as CEO of NatWest Group after confessing to informing a BBC journalist about why Nigel Farage’s account was closed. Farage’s account was with Coutts, a subsidiary of NatWest, and a data access request by Farage disclosed his political beliefs played a part in the decision.
The letter states, “The FCA has actively been pushing an approach that imposes a cultural shift and diversification of thought in banks and other financial firms.” The writers also voice their concerns about the FCA enforcing ESG changes, arguing that the interpretation of ‘environmental’, ‘social’ and ‘governance’ is debatable at best.
The letter continues, “The FCA seems to be creating and implementing ambiguous rules, including those known as ‘Principles’, that allow various interpretations.”
A part of the letter to Mr Hunt says, “In light of the off-the-record briefings against you, there should be an investigation into the FCA’s culture as part of the effort to restore integrity to the banking system.”
While the Treasury declined to comment on the FCA, they did recognize the need to address the root causes of the issue of free speech.
FCA leaders defended their stance during a recent Commons Treasury Committee hearing. The FCA CEO, Nikhil Rathi, confirmed to MPs that the regulator had been in contact with NatWest Group, the parent company of Coutts, after the Farage issue emerged.
In the same meeting, FCA chairman, Ashley Alder, suggested banks had some leeway in selecting their customers.
The FCA spokesperson clarified that the views in The Guardian article did not reflect the FCA’s position and affirmed that personal bank accounts should not be closed due to legally held political views. They added that their approach to sustainable finance was centered on developing international standards and fostering transparency and trust.
In a separate development, Arron Banks, former Ukip donor and self-titled “bad boy of Brexit”, disclosed that his bank accounts were closed. Banks alleged that the Bank of England governor, Andrew Bailey, had been informed of the broader issue at some point. Mr Bailey’s spokesperson did not comment on the claim reported by the Mail on Sunday.
