On the occasion of today’s International Day of Democracy, the Berlin-based NGO Facing Finance is publishing the twelfth edition of its Dirty Profits report: Yielding to Autocracy – the repressive government bond ties of European banks. 
“Our world is becoming increasingly autocratic, and only about one in eight people still lives in one of the remaining 32 liberal democracies — a fact that Europe’s financial industry seems unimpressed by,” laments Thomas Küchenmeister, founder of Facing Finance.

Globally, democratic structures are increasingly under pressure, as seen in the USA or Hungary, which are undergoing a massive process of democratic decline. In 2023 alone, 71 percent of the world’s population lived under autocratic governance. To maintain their power apparatus and repressive systems, autocracies rely on capital, which they also obtain in the form of government bonds through banks and asset managers.

Our analysis reveals clear financial entanglements and associated responsibilities: Between 2022 and 2024, the major European banks BNP Paribas, Crédit Agricole, Deutsche Bank, HSBC, Société Générale, and UBS helped the autocracies of the United Arab Emirates, China, Turkey, and Saudi Arabia raise more than 50 billion US dollars through government bonds. Particularly striking is the close relationship between HSBC and Saudi Arabia: over 40 billion US dollars flowed into the country during this period.

During the same period, the European financial institutions AXA, BNP Paribas, Groupe BPCE, Legal & General, Crédit Agricole, Deutsche Bank/DWS, UBS, HSBC, and Allianz invested nearly 10 billion US dollars in government bonds of the autocracies United Arab Emirates, El Salvador, Nigeria, Thailand, Saudi Arabia, Türkiye, and China. The largest amount comes from Allianz, with nearly 4 billion US dollars.

“The results show that democratic values such as free and fair elections, political participation, or the rule of law play only a subordinate role for European financial institutions,” says Dirty Profits project coordinator Mina Schmidt. “While specific human rights violations cannot be directly attributed to individual financial decisions, the figures clearly show that European financial institutions play a major role in providing capital to repressive regimes and thus keeping them alive.”

“We demand that financial institutions establish and consistently implement binding guidelines for government bonds based on the UN Guiding Principles on Business and Human Rights,” says Frederike Potts, Managing Director of Facing Finance. “But the EU must also live up to its responsibility and end the exemption of the financial sector from the CSDDD, so that the financial sector is treated like all other sectors. Established democracy metrics such as V-Dem or the Freedom House Index should be used in state assessments.”

The report sheds light on a highly underrepresented and intransparent intersection of government bonds, the influence of financial institutions, and human rights, and highlights the urgent need for the financial sector to take on democratic responsibility.

Find the German version of the study here.
Find the English version of the study here.