To know your customer, ask for her gas bill it's all part of Queen's Regulations
CHRISTOPHER FILDES Wc must hope that the Queen does not have her Jubilee spoiled by a letter from her bank, wanting to know who she is. She may be asked to show her gas bill. It is an open secret that her account is with Coutts, a suitably grand address where her family has banked since 1760, but grandeur and longevity are no defence against regulatory zeal and may even attract it. Established in 1672 and still family-owned, C. Hoare and Co. is senior to Coutts and in its way just as exclusive. Inquiries about opening accounts can be met with a counter-inquiry of 'Who's introduced you?' and prospective customers must be brought to the bank and presented. Now Hoares has been told to write to its customers asking for proof of identity. One of them, an old City hand, has banked there since 1960, but still got a letter from his manager: 'URGENT — ACTION REQUIRED. The banking industry's new regulators, the Financial Services Authority, are adopting a rigorous "Know your customer" policy. They require that the bank holds on file formal confirmation of the identity and address of all its customers. I would be grateful, therefore, if you could let the bank have certified copies of your passport pages showing the expiry date, your name and photograph, and a recent utility bill or other official correspondence showing your name and home address. These should be certified as true copies by a practising solicitor or accountant, bank manager or JP. A reply envelope is enclosed.'
Bankers' orders
ON picking himself up, this customer found his manager full of apologies. The FSA's inspectors, the manager said, had come to Hoares last December and soon told the bank that it did not know its customers. The bankers demurred but the inspectors persisted. Where, they wanted to know, were the passport copies and the utility bills? No FSA regulation requires them, thus far — it is only a recommendation — but it was put to the bank so forcefully, the manager said, that it more or less became a directive, and the bankers felt that they had to comply. Protests to the highest levels of the FSA have got them nowhere. One way and another, in time, postage, storage and nuisance value, this exercise must be costing a fortune, but we can only wait and see how far and how fast it spreads. If the FSA is working its way through the private banks, its next port of call must be Coutts, and some drafts of correspondence have already come into my hands:
Credit account
Buckingham Palace Dear Sirs, In reply to your letter, 1 am obliged to point out that Her Majesty does not have a gas bill. Gas is supplied to the Palace, but payment is adjusted by the Lord Chamberlain and the Keeper of the Privy Purse without her intervention. Nor, since a passport is a request for assistance issued by the Foreign Secretary in her name, is there any reason why she should direct one to herself. If you insist on pictorial identification, pull a tenner out of the till and have a look. If a bank manager is good enough as a witness, why won't his word suffice? You must remember that, these days, you have competition. Lord Fellowes, who was until lately Her Majesty's Private Secretary, is now chairman of Barclays Private Bank and, should her account move his way, could certainly claim to know his customer. Now be good chaps and forget all this nonsense. A. Cheesecutter-Hatt (Maj.) Sharp-Stick-in-Waiting
Refer to drawer
Coutts and Co, 440 Strand, London WC2R OQS Dear Major Cheesecutter-Hatt, However much we might wish to forget about our regulators and their directives, we dare not. Their powers are draconian and their memories are elephantine. They have recently taken over responsibility for money laundering, or rather for preventing it, and they have to make sure that Osama bin Laden is not funding himself through our books. The effect of their rules is to make it harder for those without passports or gas bills to open accounts, though Her Majesty's ministers prefer to blame the banks for this, accusing us of financial exclusion. This would, unhappily but undoubtedly, be Her Majesty's own experience, were she to attempt to move her account somewhere else. Perhaps, M the circumstances, you could furnish us with a certified copy of the Prime Minister's recommendations for the Honours List? We could count this as official correspondence.
J. Nibb Authorised Signatory
Cash in transit
Buckingham Palace Dear Nibb, You must be joking. You can take it from me that Mr bin Laden is not paying his bills through Her Majesty's private account. At one time or another she has guaranteed the overdrafts of a number of overextended relations, but he is not one of them. Your letter suggests that her account could not be moved to another bank, since the FSA's rules apply to them all. I may tell you, in confidence, that we have been approached by the Banco Ticinese dei Conti Numerati, which is conveniently located by the lakeside in Lugano, Switzerland, is happy to offer Her Majesty every facility, and tells us that her money would be in excellent company! So pull your finger out, or kiss your Jubilee medal goodbye. Your MVO (fifth class), too.
A. Cheesecutter-Hatt
Costs and charges
TO be continued. Where will the FSA's men go next with their forceful requests? If their quarry eludes the Marines, if the searchers draw a blank at Hoares and in the caves of Tora Bora. perhaps he is holed up in your local branch in the High Street? Can he have been forging your gas bill? This is how regulators build their empires. Scares come and go but the rulebook remains and gets longer, while every new scare brings a call for new rules and, of course, more regulators to enforce them. Regulation, as Professor Charles Goodhart observes, is perceived as a free good — but that is an illusion. It can never be free and may not be good, either, except for the empire-builders. When the Queen comes in state to the City next week she might even take the chance to say so.
Previous page
