Charles Walker – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Charles Walker on 2016-05-25.

To ask Mr Chancellor of the Exchequer, what assessment his Department has made of trends in the level of banks closing accounts of money service businesses on grounds relating to adherence to money-laundering regulations since July 2013.

Harriett Baldwin

The FCA have recently published a report on the nature and scale of de-risking in the UK. The report reinforces the view that de-risking is driven by a variety of factors, not just anti money-laundering compliance or a fear of regulatory action. From a data set of 23 banks the report noted that “tracking the proportionately tiny number of closures linked to financial crime concerns within this immense dataset is thus inherently challenging, especially if the reason for closure is primarily commercial, with a small component of the equation relating to ‘increased compliance costs’.”

However the report does indicate that the rate of customer exits has accelerated over the last 2-3 years.

Data from HM Revenue and Customs (the supervisor of Money Service Businesses outside the banking sector) shows that there are about 2000 MSB’s principals registered to trade with approximately 45,000 agents around the UK. It is a large and diverse sector. HMRC does hold data on the number of de-registered MSB’s, however given that MSB’s are not required to provide HMRC with information on when they have had their bank accounts closed, data on MSB’s effected by de-risking is not available.