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UK chancellor Jeremy Hunt has confirmed that the web financial institution Monzo refused to let him open an account final 12 months, illustrating what he regards because the over-onerous vetting that banks should perform on individuals in public life.
Hunt has backed a prioritised evaluation by the Monetary Conduct Authority into the “politically uncovered individuals” (PEPs) regime — a algorithm designed to fight corruption and bribery of public officers.
In an interview with the Monetary Instances final week, the chancellor stated: “We need to encourage individuals to enter public life.
“If the value of going into public life is that you simply discover it actually exhausting to arrange a checking account, then we have to guarantee that we take away limitations the place we are able to. I feel that’s why I used to be declined by Monzo for an account final 12 months.”
PEPs are people around the globe with “distinguished public capabilities” who may doubtlessly abuse their positions for personal achieve and use the monetary system to launder the proceeds.
Beneath the regulation, banks have to hold out enhanced scrutiny of PEPs, in addition to their households and shut associates, typically at appreciable price to the financial institution involved.
The problem hit the headlines this month after Nigel Farage, former Brexit get together chief, claimed that the PEPs regime often is the motive the elite financial institution Coutts determined to shut down his longstanding checking account.
Though sources near the difficulty stated Farage now not met the factors for holding an account on the financial institution, the ex-MEP advised the FT that 9 different banks had subsequently turned down his requests to open an account.
The professional-European Hunt stated he unusually discovered himself in the identical boat as Farage. “I’m a politically uncovered individual,” the chancellor stated.
Andrew Griffith, Metropolis minister, wrote to the FCA final week asking the regulator to prioritise its evaluation of the PEPs regime, saying “some monetary establishments could also be failing to strike the suitable stability of taking a proportionate strategy primarily based on a cautious analysis of the chance”.
He stated that whereas he recognised the significance of tackling cash laundering, it was “essential that an applicable stability is struck”.
The brand new Monetary Providers and Markets Act creates a distinction between a lighter contact regime that must be utilized to home PEPs and extra rigorous checks for these from abroad.
Earlier this 12 months Hunt poured reward on Monzo, apparently forgiving the British financial institution for turning down his request for an account. “We’ve Monzo and Revolut, shining examples from our world-beating fintech sector,” he stated.
Monzo stated on Sunday: “We don’t touch upon anybody’s software for a Monzo product or eligibility selections.”
