Interesting week this week. First of all it became public that the EU has put a bunch of Duth convicted terrorists on the EU-freeze list. This means that banks are forbidden to provide those clients with financial services (cards, insurances etc) beyond the most basic bank services. Which is in line with Know-Your-Customer and integrity requirements of all kinds of supervisors.
Second, the mayor of Amsterdam, Job Cohen, is now litigating against exploitants of sex-houses. Which in turn take the Amsterdam city to court. And as a part of the solution of getting rid of illegal money, Cohn suggests that banks more actively participate in the provision of loans to sex-companies/prostitutes.
So what should banks do? First of all they need to keep the system clean and kick-out all kinds of vague customers. Having done so, they should accept those same customers and provide them with basic banking services, loans etcetera, in order to kick the criminals out of their financial business. But doing so will be a violation of the former integrity-requirements as well as the individual freedom of banks to choose with whom they want to do business.
The end result of this discussion can be no other that sometime, somewhere in the next years, we need to set up a state owned bank that provides these services/loans to 'bad customers' so that the public policy goal of accessability of banking services can be guarantueed without demanding banks to execute political inconsistent orders.
