The way in which British banks are conducting criminal acts is “a threat to national security” says a new report from the National Crime Agency, a UK crime fighting body.
Keith Bristow, the director general of the National Crime Agency, said money laundering by banks and other illegal activities risked undermining the “reputation of the UK.”
This warning predicts that a that if other companies and countries loose faith in the British banking system it could trigger a sharp fall in the tax revenues generated by the City.
According to the report, “many hundreds of billions of pounds of criminal assets” are being laundered through British financial institutions.
This news comes as HSBC has been making headlines after the UK tax authority is expanding the scope of an investigation into Swiss tax accounts, which could have been used to avoid tax.
Many people where accused to have been using these Swiss accounts including a number of celebrities and politicians.
The National Crime Agency have proposed that ten of the country’s largest banks should sign an agreement which will see them voluntarily hand over details of the accounts and financial transactions of people suspected of money laundering and other serious offences.
If this were to go ahead, the deal is thought to end decades of secretive practice, currently allowed by law, which allows the banks refuse to hand over account details without a court order.
Keith Bristow insists that the agreement would be justified as the scale of money laundering in the City is so large that it poses to a threat to the economy and national security.
The told the Evening Standard, “We need the evidence to investigate people and bring them to justice. We have an interest as an agency in the reputation of the UK. It’s a national security risk. Hundreds of billions of criminal assets are laundered through UK financial institutions.”
He added: “We are not cheerleaders for the banks, but they deserve credit for taking some risk to help us target these people. It’s a genuine change through an information sharing partnership that will give us opportunities that we would otherwise not have had.”
The information sharing agreement follows a meeting last year between Home Secretary Theresa May, the British Bankers’ Association, the Financial Conduct Authority and the National Crime Agency.
The scheme will be piloted for a year, beginning in February 2015, and will be expanded to include further banks if successful.
In this scheme the banks will release account information if the National Crime Agency suspects the user of a “suspicious activity.”
Martin Bentham, the Home Affairs Editor at the Evening Standard has been following this story.