After a row over the closure of his bank account earlier this year, former politician Nigel Farage has hit out at the UK financial regulator for saying it has found no recent evidence of customers being “de-banked” over their personal views.
Farage believes private bank Coutts closed his account because his political views didn’t align with the company’s values. Coutts and its parent company NatWest Group denied his accusations, saying he didn’t have enough funds to be a customer of the private bank. Farage was offered an account with NatWest’s high street arm but reportedly turned it down as unsuitable.
UK chancellor Jeremy Hunt asked banking regulator the Financial Conduct Authority (FCA) to gather data from all UK banks about the reasons for any account closures, suspensions and services denied between July 2022 and June 2023. Farage’s account was closed during this period.
Admitting the data was gathered very quickly, FCA chief executive Nikhil Rathi, said: “While no bank, building society or payment firm reported to us that they had closed accounts primarily due to someone’s political views, further work is needed for us to be sure.”
Indeed, banks being choosy about which customers they accept is nothing new. Farage’s furore has simply highlighted private bank behaviour that has persisted without much comment over centuries.
The origins of private banks
When Coutts was set up in London in 1692, banks generally acted as an intermediary to encourage trade and the free flow of goods and services – but only for the rich. Banks facilitated the greater flow of capital among this exclusive group by lending them money, discounting their bills of exchange (like an IOU note) and providing them with deposit accounts.
In the 18th and 19th centuries, banks proliferated outside London, throughout England’s provinces. London banks were typically larger and often funded international as well as national trade. Otherwise, there were few differences between London banks such as Coutts and these new country banks. They were both generally single units (no branches) and founded by a similar social group – the gentry – who initially offered financial services to their peers.
