Are politically correct decisions starting to emerge from the FCA?
Paul Flowers a former Methodist Minister was chairman of the Co-Op bank between 2010 and 2013. He has been given a lifetime ban from working in the regulated financial sector for a “lack of fitness and propriety” required to work in the industry.
Can the FCA expect interested and relevant parties to believe that using a work mobile phone for calling a premium rate chat line and using his work email for inappropriate messages are specific grounds for a lifetime ban? Would a court of law reach this type of decision? Possibly in the court that sat for Toad of Toad Hall’s speeding offence for which he was jailed and effected a memorable escape by jumping off a train.
It may well be grounds for dismissal and sanction by an employer – even though inappropriate emails circulated in many firms up until 08-09, possibly warranting some sort of inappropriate flag on the FCA “form C” used to explain the reasons for a regulated person leaving a business and it might make references to future employers difficult and be the subject of a conversation with the FCA. The Co-Op Bank applied for his application in 2009 to the FCA and they authorised him in his titular role. So, both parties are complicit in allowing him to operate in a senior “controlled function” in the first place.
The Co-Op Bank nearly collapsed so something must have gone wrong but then so had many other banks earlier in 2008. The reason that many former mutual building societies got into trouble was the fact that they over relied on short term funding to make long term loans. A factor that must have been obvious to auditors for many years before 2008 when the funding dried up in the banking crisis. The general lack of any accountability for those that oversaw these former mutual societies is well known.
For Mr Flowers, the real reason might be to get him out of the way by officially disgracing him and obstruct him from demanding Maxwellisation rights so that the Treasury can conduct its review into the way the Co-Op Bank was supervised between 2008 and 2013. As chairman, he is likely to figure, but then probably so are many others. If this is the case the specific reasons given against him appear to be very weak in the context of how the Bank was run and allegedly mismanaged.
Why has the FCA taken so long to reach this almost self-indulgent, personal behavioural as opposed to institutional failing based judgement? This appears to blur any differentiation between undoubted unattractive personal behaviour and failure to conduct a management role. Is this what we should expect from a powerful regulator?