Published by Global Banking & Finance Review®
Posted on February 20, 2026
6 min readLast updated: April 3, 2026
Add as preferred source on GooglePrince Andrew’s arrest on suspicion of misconduct in public office over alleged Epstein links has sparked the gravest royal crisis in decades. The palace distances itself as police continue inquiries and the monarchy’s public support is tested.
By Michael Holden and Kate Holton
LONDON, Feb 20 (Reuters) - King Charles woke up on Friday to pictures of his younger brother leaving a police station emblazoned across front pages of newspapers around the world, heralding the worst crisis for the British monarchy in 90 years.
The arrest of Andrew Mountbatten-Windsor on suspicion of misconduct in a public office, and the public humiliation over his relationship with the late convicted U.S. sex offender Jeffrey Epstein, has left some wondering if the saga could spell the beginning of the end for the 1,000-year-old institution.
Graham Smith, the head of the campaign group Republic which filed complaints with the police over the former prince and Epstein to trigger the investigation, used the arrest to repeat his demand for the institution to go.
"I think it's incredibly bad for the monarchy," he said.
Mountbatten-Windsor has denied any wrongdoing with regard to Epstein and said he regrets their friendship.
SCANDALS AND CRISES
The House of Windsor is no stranger to scandals, embarrassments and calamities.
From the divorce and death of Charles' first wife Princess Diana in 1997, which caused widespread public anger, to the upheavals caused by the king's younger son Prince Harry and his wife Meghan stepping down from their roles and then criticising the institution from the U.S., the family has been at the centre of high-profile dramas before.
But the current situation of a senior royal under investigation and police arrest is without precedent, and leaves the monarchy facing its greatest threat since Charles' great-uncle, King Edward VIII, gave up the throne to marry U.S. divorcee Wallis Simpson in 1936.
"It's certainly the worst crisis since the abdication, and it's particularly bad because it's not a crisis over which they can really exercise any control," said one former senior royal aide who knows the king well.
"They have been sort of predominantly on the back foot throughout because they've had to react to information emerging, and they still don't know what else is in the files," the aide told Reuters, speaking on condition of anonymity.
FORMER PRINCE ALREADY STRIPPED OF TITLES
The key question for Charles, William and their courtiers is whether the scandal around Andrew does lasting wider damage or just reinforces the already negative view most people had of Mountbatten-Windsor himself.
The royals have already banished the former prince as much as they can, stripping him of all his titles, his mansion and any public involvement with the family.
The king, who is still undergoing treatment for an unspecified cancer, and Queen Camilla have said their thoughts and sympathies are with the victims of any abuse. William and his wife Kate have said they are "deeply concerned" by the revelations in the Epstein files.
The king's blunt public statement following his brother's arrest - "Let me state clearly: the law must take its course" - was a clear attempt to go still further.
"The institution has taken every step that it can to distance itself from him and his actions," Julian Payne, Charles' former communications chief, told Reuters.
"The hope is that by doing so, they can create some clear blue water between the working members of the family and what they exist to do on behalf of the UK and the other countries around the world where he is king, and this person and the actions that they are responsible for answering."
ROYALS STILL POPULAR
The most recent popularity tracker by pollster YouGov in January, before the release of millions of files relating to Epstein by the U.S. government which heralded the British police investigation, showed only 3% of Britons viewed the king's younger brother favourably. Some 90% held a negative opinion.
But the rest of the family and the monarchy itself are held in much higher esteem. William is viewed positively by 77% of the public and the king by 60%, the tracker showed.
The monarchy itself, while not as popular as it was and struggling to maintain the support of younger people, is still backed by a comfortable majority.
"It's challenging and it doesn't reflect well on the family as a whole, but I think they'll survive," Jeremy Paul, 59, an accountant, told Reuters on his way to work on Friday.
Republic's Smith said it would be "'game over' for the royals" if a police investigation revealed anything that suggested Charles or his eldest son and heir Prince William had known more about Mountbatten-Windsor's close ties to Epstein, and failed to act.
There is no suggestion, so far, that that is the case.
ALLEGATIONS RELATE TO ANDREW'S TRADE ENVOY ROLE
While the royals will be fearful of what more might emerge from the Epstein files, nothing is likely to implicate the key figures of Charles and William, the former aide said.
Mountbatten-Windsor was arrested on suspicion of misconduct in public office over allegations he sent confidential government documents to the disgraced financier Epstein when he was a trade envoy.
Charles had cautioned against his younger brother being given the trade job over which he is now being investigated, while William does not have any time for his uncle, the former aide said.
"It's not existential ... I don't think it'll bring the monarchy down, I know quite a few people are thinking about that," the aide said.
"I think it'll do significant harm that will be quite lasting. But I think in the king and in the Prince of Wales, the right people are there to maintain and restore sufficient trust and respect."
(Additional reporting by Vitalii Yalahuzian; Editing by Alex Richardson)
The article analyzes the fallout from Prince Andrew’s arrest on suspicion of misconduct in public office linked to his association with Jeffrey Epstein, and the implications for the British monarchy.
Political and institutional crises can affect UK risk perception, media sentiment, and policy bandwidth. While direct market impact may be limited, prolonged instability can influence sterling, gilts, and UK equity risk premia.
Andrew has been released under investigation. Police continue inquiries and may refer the case to prosecutors; any charging decision would follow evidence review and due process.
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