Regulation  

TSC hears of lax supervision of Co-op’s Flowers

Mr Tyrie was speaking on Tuesday 7 January, as the FCA’s director of supervision Clive Adamson gave evidence to his committee on the FSA’s role in the collapse of the Project Verde plan for the Co-op to buy more than 600 Lloyds Banking Group branches.

Mr Adamson, the former director of the FSA’s major retail groups division, admitted to the committee that Rev Flowers did not receive any ongoing supervision in his role, despite his obvious lack of expertise.

The committee heard that Mr Adamson was not aware of a drink-driving conviction handed out to Rev Flowers in 1990, while he deemed a spent 1981 conviction for gross indecency as “not relevant to his capacity for the role”, as Rev Flowers was to be chairman of the board, not running the bank itself.

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He also confirmed that Rev Flowers had only been interviewed by two “relatively junior” members of FSA staff when he became a non-executive director of the bank in 2009, with Mr Adamson subsequently meeting Rev Flowers once in 2010 ahead of his elevation to the chairmanship of the bank.

Mr Adamson’s evidence followed an FCA announcement earlier this week that it would be undertaking enforcement investigations into events at the Co-operative Bank up to June 2013.

Adviser view

Tony Larkins, managing director of Cambridgeshire-based Beacon Wealth Management, felt sure as to where the responsibility for Flowers’ failure over Project Verde lay.

He said: “The responsibility over someone’s suitability for a role has to be with the employer, so in this case it has to sit with the Co-operative Bank, who must have seen certain qualities in Paul Flowers as its chairman.”