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Dame Alison Rose, NatWest’s CEO of four years, has resigned from her position after admitting that she broke confidentiality rules following the closure of Nigel Farage’s Coutts bank account.
In a resignation statement posted at NatWest.com, Rose said she made a “serious error of judgment” in discussing Farage’s Coutts account with BBC journalist Simon Jack.
Last week, the BBC published an article entitled: “Nigel FaraIge bank account shut for falling below wealth limit”.
The BBC has now edited the article to emphasise that Farage’s account was closed down because of commercial reasons and that his views are “at odds” with those of Coutts.
Rose said she was the source of the article’s claims, although she also said that Jack had misunderstood the information she provided to him.
“I would like to emphasise that in responding to Mr Jack’s questions, I did not reveal any personal financial information about Mr Farage,” she said.
“In response to a general question about eligibility criteria required to bank with Coutts and NatWest, I said that guidance on both was publicly available on their websites.
“In doing so, I recognise that I left Mr Jack with the impression that the decision to close Mr Farage’s accounts was solely a commercial one.”
Although Coutts is a wholly-owned subsidiary of NatWest, which is 38.6 percent owned by the UK government, Rose said she was not part of the decision-making process that led to the closure of Farage’s account.
Following the account closure, Farage was able to obtain a 40-page dossier compiled about him by the Coutts Wealth Reputational Risk Committee.
The dossier described Farage as holding “xenophobic, chauvinistic and racist views”, but acknowledged that Farage’s expression of his views is “within the law”.
Commenting on Rose’s statement, the Financial Conduct Authority (FCA) said it has “raised concerns” with NatWest and Coutts regarding the account closure and breach of confidentiality.
“We made clear our expectation that these issues should be independently reviewed,” said Sheldon Mills, executive director for consumers and competition at the FCA, something Rose confirmed would happen in her statement.
“It is vital that the review is well resourced and those conducting it have access to all the necessary information and people in order to investigate what happened swiftly and fully.
“On the basis of the review and any steps taken by other authorities, we will decide if any further action is necessary.”
Regulations to protect against account closure
At HM Treasury, the revelations have added to calls for new rules against “unfair” account closures to be swiftly adopted.
Under plans revealed last week, the Treasury will increase the notice period prior to an account closure from 30 to at least 90 days, giving customers more time to challenge the decision or find a replacement.
Banks and payment service providers (PSPs) must also give a clear explanation for the account closure, and must “aid” the customer in their efforts to challenge the decision.
Andrew Griffith, economic secretary to the Treasury, said the new rules will provide a “much fairer playing field” for financial service providers and their customers.
“Freedom of speech is a cornerstone of our democracy, and it must be respected by all institutions, he said.
“Banks occupy a privileged place in society, and it is right that we fairly balance the rights of banks to act in their commercial interest with the right for everyone to express themselves freely.”
Speaking to VIXIO, a Treasury spokesperson said the new rules will require secondary legislation, which will be delivered through the powers granted in the Financial Services and Markets Act 2023.
According to the Treasury, the plans were devised following a call for evidence launched in January this year, after PayPal suspended several accounts due to customers’ viewpoints.
Sharokh Koussari, discrimination lawyer at Axiom DWFM, told VIXIO that the proposal to extend the notice period prior to closing an account should be welcomed by customers.
“Many people may disagree with Farage and find his ideas revolting, yet his plight demonstrates what people who are unjustly unbanked feel, in particular when the reason for the closure of their accounts was discriminatory,” he said.
Koussari pointed out that although “philosophical belief” is considered a protected characteristic under the Equality Act 2010, this is yet to be backed by a strong precedent in litigation.
“The closure of Nigel Farage’s bank account will hopefully bring into focus that banks have been arbitrarily and very often unfairly closing down bank accounts of many of their customers with the pretext of de-risking,” he said.
“None of these cases have led to a precedent being established, as most appear to have been settled by the banks.”
In addition to new account closure rules, the Treasury said there are separate plans to clarify in legislation the requirements for politically exposed persons (PEPs), and a review into whether these are being applied proportionately by financial institutions.
These steps were commissioned by parliament last month, and the FCA will set out how it intends to conduct the review by the end of September.
