David Cameron has raised the prospect of an inquiry into the Co-op Bank over its financial struggles and embarrassing revelations about its former chairman the Rev Paul Flowers.
The prime minister described Flowers as the "man who has broken a bank" following questions about his financial competence, drug-taking and resignation as a Bradford councillor over adult material on his computer.
I find this quite extraordinary. Paul Flowers has clearly failed in his job, in the expectation of him as a Methodist minister and as a councillor. All are a personal tragedy and it is clear an inappropriate person appears to have been appointed the chair of a bank - which is also a failure by the FSA.
But does this require an enquiry? I doubt it, very much. This has a great deal of similarity to the seemingly related demand for an investigation into union campaigning - which once more seems to be a massive exercise in misuse of government funding for party political purposes.
There are enquiries we do need. For example, how is it that HSBC still has a banking licence despite paying almost $2 billion in fines for money laundering? And perhaps even more importantly, how did David Cameron appoint the chair and former chief executive of that bank who was in office when those offences took place to be a member of the House of Lords and a trade minister in his government?
There should also be an enquiry into bank mis-selling. Where's that?
These seem to be issues requiring investigation. Paul Flowers and Unite's campaigning are not.
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You just need to wait for a government minister to be caught in a vaguely similar position, in which case it will be time to demand that the prime minister announces an enquiry into how he ever appointed that person in the first place.
Perhaps we can expect the FSA to introduce random drug testing in the future because without that I can’t see how any employer or regulator could actually know.
We do have a minister in such an appointment – Lord Stephen Green – whose bank, HSNC, was fined $2bn for offences on his watch
Much more serious than a personal dope head issue
The Reverend Stephen Green no less.
Hmmmm….
http://mainlymacro.blogspot.co.uk/2013/11/why-no-public-fury-over-austerity.html
I suspect the two enquiries mentioned are publicity enquiries. They will, of course, have carefully selected chairs and boards.and be carefully reported by the mainstream press. No doubt tha BBC will be instructed to panorama it.
Here’s another thing to consider:
http://www.zerohedge.com/news/2013-11-19/how-washington-dc-sucking-life-out-america
(change Washington to London, and America to Britain)
With the housing market bloated by cheap loans I worry about interest rate rises….
That’s it!…..a nothing to see here, move along blog entry!
You won’t talk about Unite, claiming professional conflict but you will blog that there should be no enquiry!
Then after all your claims that professional banking managers are unfit and we need independent representatives from the wider public, we get an independent religious manager for the Co op failing in a huge way and……no enquiry, nothing to see here……instead its what about HSBC, they suck too……..
I will talk about Unite where it is relevant
There is nothing whatsoever to investigate about it holding a street protest – that’s the stuff of democracy
There has been an appalling appointment at the Coop
But what about money laundering at HSBC?
And let’s really go for LIBOR
And how about PPI mis-selling and why has no one been done?
These are bank breaking
Coop is small beer in comparison
Sop this is down to abuse of power by the government and selective bind eye turning and that was and is my point
“But what about money laundering at HSBC?”
HSBC was not fined for money laundering Richard, as you well know. It was fined for not having the paperwork to show that it could prove no money laundering was going on.
“All are a personal tragedy and it is clear an inappropriate person appears to have been appointed the chair of a bank — which is also a failure by the FSA. ”
I’m sure there’s a piece in the archives here where you complain bitterly about the FSA trying to insist that Directors of the Co Op Bank should have some acquaintance with banking.
Tim, we all know how these settlements work
And we also know how you just love to excuse crime
And if in doubt, let’s also consider the role of HSBC’s private bank in Switzerland
And no, I very much doubt there is such a piece in the archives
Tim, is this the one you’re thinking of?
http://www.taxresearch.org.uk/Blog/2012/07/02/banking-2012-the-crisis-we-have-to-address-and-how/
How many non bankers are there on other boards?
Would you like to answer?
Frankly, no greater cautionary tale could be written as it relates to Rev. Flowers. What his alleged conduct brings into focus is the depths to which those involved in the financial sector (with unlimited access to money, politicians, power and all other forms of avarice) can, and do, sink to in today’s environment of me, me, me, me.
A measured approach would be to conduct an official enquiry into ALL high-level personnel involved in the financial sector. Undoubtedly the alleged conduct of Rev. Flowers would pale in comparison to the very real personal misconduct of his peers. This sort of omnibus enquiry would accrue two benefits for those of us involved in the struggle for social justice: a) it would lay open, for all to see, the complete moral failure of those involved in finance, and b) the failings of others would eclipse the alleged failings of Rev. Flowers and put the focus squarely on the financial sector as a whole vs. one person.
do you have a problem with investigations into misuse of public office? Surely if there are abuses then it is right the accused are either exposed or exonerated.
I have no problem with rooting out abuse
I have a problem with abusive investigations
Yes – I couldn’t help noticing how immediately following the report on the Paul Flowers scandal the BBC reported – without the faintest trace of irony or connection! – how J.P.Morgan Bank in the USA had beed fine $13.6 for flagrantly inappropriate mis-selling of mortgages.
Alas, the BBC seems to have lost its moral compass and professional judgement. I’d like to say the same about Cameron, but am beginning to think he hadn’t any, or very little, of either to lose. To order an expensive enquiry into the Co-Op Bank on the basis of one man’s moral turpitude is cheap, and judgement-light (judgement-free?), electioneering of the crudest kind. How Dave’s banking chums would love to succeed in blackening the namne of a Bank that did at least try to be ethical!
Sorry for typos, (owing to using mobile) but even more for the really substantive error; “beed fine $13.6” SHOULD have read “been fined $13.6 billion”
Even for J.P.Morgan that’s real money!
As I understand it, JPM will be able to claim debt relief so the actual sum will be more like 5bn and will come nowhere near exceeding the profits gained from mortgage etc fraud. According to Professor Bill Black, this fine is a strategy dreamt up between Jamie Dimon and Eric Holder as a sop to public opinion. Furthermore, the money seems to be being paid into the Federal Reserve rather than to compensate those dispossessed former (largely black) householders.
Agreed
Since banks have no money of their own the debt eventually falls on depositors/customers/investors.
That is the reason I tend to be unimpressed when people say that the PPI debacle will teach the banks/insurance companies not to fiddle the books again.
The banks customers will pay their own PPI refunds: eventually.
Large fines, which cost them little, are no substitute for large custodial sentences served inside a penal institute by the thieves within the banking system.
The entire PPI scam, and all the others, reveal the corruption within the financial system.
Nest.
Of.
Thieves.
Why not both? I don’t see why we don’t need enquiries into the Co-op and Unite just because other enquiries are also needed.
“There is very likely some politics involved in calling for an enquiry”
So says the ITN news at 6.30. You don’t say!!
I’m paraphrasing what was said, but that was the gist! Nothing like good old British understatement!
As you say, there seems to be less will to open an enquiry into the far-more-dodgier goings on at HSBC.
Can’t think why!!
Surprise< surprise here's another story that appears to have been overshadowed by the Paul Flowers story:-
http://www.standard.co.uk/business/business-news/banks-misled-taxpayers-on-royal-mail-float-value-8951565.html
I think I would prefer a public enquiry into why Goldman Sachs and UBS got the pricing of the Royal Mail flotation so wrong and cheated the taxpayer of more than £1 billion. Could this be another exercise in privatising profits after losses have been socialised?
Moreover what happened to the enquiry into the Reverend Green and HSBC, "the bank that likes to say yes" to money laundering for Mexican drugs cartels?
I want a public enquiry into all the goldman/sachs placemen in the EU, and the higher political places across the WORLD.
I doubt we can expect it from the bought politicians, I doubt we can expect it from the owned news media and we certainly cannot expect it from the totalitarian placemats in the EU higher echelon.
Maybe we can also have a look at the tory funding, after all…if the forthcoming political enquiries are going to examine, in great depth, the unions and the labour borrowing from the CoOp bank, we can surely have a look at the money the tories have been gifted…..hundreds of millions….money isn’t given for nothing, is what is being said about union money (for which the tories insisted the unions asked their members as to whether they wanted to contribute) but not so much about what business expects for its hundreds of millions.
As if we didn’t know.
“They hang the man and flog the woman,
Who steals the goose from off the common,
Yet let the greater villain loose,
That steals the common from the goose”
– Seventeenth-century English protest rhyme
(http://www.wealthandwant.com/docs/Goose_commons.htm)
There would seem to have been little progress………….
Spot on, JohnM. Quote of the day. What an illustration of how little has changed. Or more accurately put, how far we’ve moved back toward the master-servant/serf relations of centuries past. Much to the satisfaction of many of the 1% I suspect.
That piece in the archives:
http://www.taxresearch.org.uk/Blog/2012/07/02/banking-2012-the-crisis-we-have-to-address-and-how/
“And heads need to roll. Whole rafts of senior bankers need to leave the industry: their mentality is corrupt and has to be swept away. There will be decent people who can take their places: have no doubt about it. But it will take leadership from a new type of non-exec director dedicated ti making banking work again that will let this happen. Again, I think such people exist; they’re just the outsiders now. The farce that the Coop was told recently that its board was not suitable to run a bank because it was not made up of bankers has to go: it’s precisely because people are not bankes that they may be suited to their new roles of making sure banks are clean, although competence will also be important too, of course. “
Wow: you have got time to waste on my archive
Did I ask for coke heads to lead banks? I don’t think so
Get real
A mistake was made
That does not for one moment change the substance of what I wrote
Time to waste? It takes a few seconds to find: search for “coop bank” and glance through the headlines for something that looks appropriate.
Time to waste then
If idly running a search with one hand while sipping my mid-morning tea with the other and mulling over which bit of work to do next is wasted time, then yes.
We are going to get into very dodgy terrain if you and others want to continue down this road, Tim. I can assure you – and you may well know this anyway, as will many of the readers of this blog – that there are thousands (probably hundreds of thousands across the world) of people occupying all kinds of positions in organisations of all kinds, and particularly in management, who have little or no background/experience in the particular sector or field in which their organisation operates. What they do have – or claim to have – is a set of skills/knowledge that are deemed to be generic and contextually transferable. Every MBA programme that I know of is built on this premiss. It informs pretty much every “self help” book on management or “being successful in business” book that I’ve ever come across. And management consultancy – in which we’ve placed so much faith across both public and private sectors these past thirty years – would disintegrate without such an approach.
Whether our faith in this principle and the beliefs on which it is based are warranted is a topic much debated in management literature. Ultimately it seems that in many cases it works but sometimes it doesn’t, with contextual, temporal, personal/behavioural variables playing their part in whether generic skills are enough to make a manager successful in a particular enterprise, at a particular time, or not.
Of course, many people try hard to learn about aspects of organisation and management in fields they are not familiar with. For example, over the years I’ve had many students from the military who study to gain a better understanding of how organisations in the “real world” (as they often call it) operate so that when the time comes they are better prepared to enter civvy street. And I have lots of students from a techie background (engineers, IT, etc) who realise that it would be a great benefit to them and to their employers if they learnt about management before they attempt, or are forced, to make their way up the greasy pole. But my belief would be that for every person who makes that effort, there are an equal number – and probably far more – who can’t or won’t, and are happy (or forced – for one reason or another) to wing it.
Finally, but importantly, we shouldn’t forget that a significant number – in fact in some cases, the majority – of the members of any government (and plenty of their advisers) have little or no experience in or of the policy domains they are asked to take control of. And yet in all too many cases it never stops them from making pronouncements, or pursuing policy initiatives, despite their lack of experience and knowledge.
“For example, over the years I’ve had many students…”
Ah! So from that we can presume your actual experience is…?
Perdu en france
As I don’t hide behind a silly name when I comment on this blog you can check my employment background anytime you wish. It’s publicly accessible. That doesn’t negate the fact that being able to draw on the experience of many hundreds of students over many years provides me with insights I would not otherwise have access to.
Tim I don’t anyone disagreed that Flowers was not suitable to be a chairman of any bank, let alone a large one. However, too much is being made of it by the Right for political purposes compared to the attention that Barclays and HSBC to name two received for their heinous misdeeds.
I can’t help believe that this is typical distraction away from something else…..
No doubt the international bankers see the Co-operative Bank as a small competitor and a thorn in their side. I think that they will take the view “Give them enough rope and they will hang themselves.” In the past we saw the manipulated crash of Barings and later the fall from grace of Dominique Strauss-Kahn.
I agree with you, Richard – this will not damage the Co-op principle in general. A more healthy business environment is maintained when more than one structure is used to provide our financial services though at the moment I am trying to block out memories of Equitable Life!
We need to find the truth out. For everyone, not just a few inside people. This isn’t just about the Co-Op this is about the charities as well. How did this man be able to do what he was doing. What made everyone who knew, there are people who did know to hide and lie about the truth??
There were so many warnings given no spoke up.
Respectfully – if you think this is the biggest issue of concern right now you are seriously missing the point
The ethical co op ran off with my money. HSBC hasn’t. Maybe I should just sue them.
You have not lost a penny with the Coop
Why are you suing for what?
http://www.telegraph.co.uk/finance/personalfinance/investing/bonds/10451980/Co-op-bonds-Vote-or-lose-everything.html
I cant sell them at the moment because of the flowery trouble they are in. As each day goes past, it appears the only type of money the Coop was interested in, wsa the notes to put up their noses.
I should have kept my HSBC shares, at least they are okay.
The error was earlier
I regret that the lessons of Northern Rock were not learned by 2009
“We need to find the truth out. For everyone, not just a few inside people.”
Fine, shouldn’t we concentrate on the biggest “issues”, of which there are many, first though?