Jago Russell and Ross Ludlow explain the reasons behind the trend for de-banking
- Covers growing trend of banks to ‘de-bank’ customers in order to mitigate risk, which the Nigel Farage debacle highlighted.
- Banks are expected to police these risks and face severe penalties if they do not, therefore may de-bank clients to protect themselves.
On 2 October 2023, HM Treasury announced ‘tougher rules to stamp out debanking’, promising a public consultation and legislative change in 2024. The announcement followed public concerns about the closure of Nigel Farage’s bank account at Coutts, on the basis of his personal and political views. Farage’s case is, however, just one example of a growing trend. Banks are becoming increasingly risk-averse, utilising their ability to ‘de-bank’ customers as a tool to mitigate a range of risks and to manage their regulatory burdens.
Losing access to banking facilities can have profound implications. Without access to a bank account, individuals and business may be unable to receive or pay salaries, to
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