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Why the Co-op Bank saga makes a mockery of the regulator

I am sure that today in the newspapers you will have read even more about the absurd Co-op Bank saga. I am not going to try to add to the political debate or the debate about whether regulatory organisations have a purpose. What makes me chuckle is the following:

About a year or so ago the Co-op Bank then headed by its chairman (yes it’s the same guy!) was in deep discussions with the regulator to buy Lloyds Bank. We all know now that was quite a naive proposal because the Co-op Bank had in fact a big hole in its finances. What totally confuses me though, is that the regulators were happy to have this discussion with the representatives of Co-op Bank, yet they were very well aware of the professional qualification of the management team! Let’s get real!

Why was it over looked and why was it tolerated? When you and I open up a bank account we are subjected to rigorous tests and we have to jump through so many hoops to prove that we are capable, (such as “treat your customer fairly” and “know your customer”) so why does it not apply to the guys who are running the bank! It’s one rule for us and another rule for them!

There is now so much regulation going on that there are bound to be areas of no regulation at all! And to risk opening u a can of worms, who will regulate the regulators? But let’s not go there right now…

I haven’t got a solution. All I can suggest is let’s all see the funny side of it but if I had the choice of appointing a chairman; let’s say Bob Diamond who got kicked out of Barclays or Mr Fowler then I would rather take Bob Diamond because at least he is a hard-nosed business man – but let’s be honest it is a little bit of Hobson’s choice!

What do you think on the subject – let me know.

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