Peston’s ponderings – FSA and Flower-power
Robert Peston in his BBC Blog writes:
I spent a bit of time yesterday trying to find out a bit more about the Reverend Paul Flowers – because it is not every day that a former bank chairman is caught on camera apparently trying to buy cocaine and crystal meth from the front of a car in Leeds.
But Flowers, who stepped down as chairman of the Co-operative Bank and vice chairman (no pun intended) of the Co-operative Group in June this year, was no ordinary banker.
how on earth did he end up on 29 March 2010 becoming chairman of the Co-operative Bank – a bank with £50bn of assets, £36bn of customer deposits and 4.7m customers? … his appointment coincided with the most challenging time in the bank’s history.
His appointment also came more than two years after … those who ran the regulator, the Financial Services Authority, had pledged they would take extra care to make sure that those appointed to chair banks had appropriate skills and knowledge.
So how and why did the FSA approve the appointment of the Reverend Paul Flowers? BBC Correspondents’ blogs: Robert Peston : How did Flowers bloom at Co-op Bank?
Perhaps it is quite simple. Let’s look at some of the British Banking failures/troubles and where they were based when they had their “local difficulties”:
- Royal Bank of Scotland : Head Office – 36 St Andrew Square, Edinburgh, United Kingdom, EH2 2YB
- Halifax Bank of Scotland : Head Office – The Mound, Edinburgh EH1 1YZ
- Dunfermline Building Society : Head Office – Caledonia House Carnegie Avenue Dunfermline Fife KY11 8PJ
- Northern Rock Building Society : Head Office – Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
- Bradford & Bingley Building Society : Head Office – Croft Road, Crossflatts, Bingley, West Yorkshire, BD16 2UA
- Co-operative Bank : Head Office – P.O. Box 101, 1 Balloon Street, Manchester, M60 4EP
Now let us look at where the regulators are/were based:
- The FSA – 25 The North Colonnade, Canary Wharf, London E14 5HS (now replaced by FCA & BoE)
- The FCA – 25 The North Colonnade, Canary Wharf, London E14 5HS
- The Bank of England – Threadneedle St, London, EC2R 8AH
This leaves us with three possible conclusions:
- Everyone outside London is incompetent (“Not my fault Gov”) – in which case why were the regulators not out there?
- The regulators do not think that there is anyone financially significant outside London (Myopia) – so no damage done then by the above failures?
- The regulators cannot be bothered to take more than a short taxi ride around London. (Recklessness, Laziness or Negligence?) – so are we still open to poor regulation?