The case for impartiality in finance

“The Government is reminding banks that they must not attack customers’ free-speech rights by closing the accounts of those whose opinions they dislike.”

“The real question is “What is a bank?”. The answer, in modern society, is that it is a vital service for almost every adult citizen.”

“To close someone’s bank account is to cut them off from what they need for life in modern society. It could also be a way of destroying their reputation and creditworthiness.”

“If the banks do not rein back, how long before utilities such as gas or electricity feel free to cut you off for holding certain views?”

I hope that Charles Moore will forgive me for stealing these extracts from his article in The Telegraph of 4 July 2023. I would like to use my own words but I cannot put any more eloquently the issues faced in the United Kingdom by some of those who hope, or even keep, a bank account.

The issues are far reaching. How can anyone live a normal, every day life without access to banking? How can anyone who wishes to buy a house hope to get a mortgage if their credit rating has been lowered for no financial reason?
It may seem far-fetched to think that holding what those in a position of power might consider to be the “wrong” views could act in such a way that their impact on your life could lead to cold, hunger, even the loss of a home. For without access to your own money, this could happen.

But have a look at our earlier post which looked at how the Trudeau government in Canada closed the bank accounts of truckers in 2022 and consider how much further it reached. We have testimony of people to donated to the truckers and found their bank accounts closed soon afterwards.

Let’s take those actions and consider what might be possible if the State were able to have a greater control over and knowledge of our finances.

This is not fantasy. In its TechDispatch #1/2023 – Central Bank Digital Currency of 29 March 2023 (https://edps.europa.eu/data-protection/our-work/publications/techdispatch/2023-03-29-techdispatch-12023-central-bank-digital-currency_en) the European Data Protection Supervisor, which is part of the European Union, says,

“Programmability of CBDC is also an important design choice. Programmable payments are different from programmable money. Programmable money consists of a CBDC with built-in rules, imposing restrictions on the usage of that money. With this feature, a government could also define a positive or negative interest rate to incentivise or disincentive the use of money for the purchase of a particular good; limit its use to a certain category of services; set an expiry date.”

I end referring you again to the insights provided by Charles Moore in my final quote from him. With programmable payments, this begins to become more frightening.

Also in on this seems to be the Official Monetary and Financial Institution Forum, but in a more muddled way. In an articles from July 2021 which appears on its website (https://www.omfif.org/2021/07/cbdc-systems-should-focus-on-programmable-payments/) it says at one point, “Programmable payments, on the other hand, enable automatic transfers to be carried out or blocked when pre-determined conditions are met.” Yet in the same article the author goes on to say, “And people can be sure that CBDCs are just a digital form of cash, without any usage restrictions or privacy issues.” Yet what is automatically blocking a payment if pre-determined conditions are not met if it is not a usage restriction? And who will determine that these conditions are?

I will let the final word go to Bo Li, the deputy managing director of the IMF who is responsible for the IMF’s work on about 90 countries as well as on a wide range of policy issues, who said at the IMF-World Bank Annual Meeting of October 2022,

“CBDC can allow government agencies and private sector players to program…targeted policy functions. By programming a CBDC, money can be precisely targeted for what people can own and what [people can do.]”