Taber bemoans lack of FCA oversight over Co-op Bank

Mr Adamson admitted to MPs that he approved the appointment of now disgraced Rev Paul Flowers as chairman of the Co-op Bank in 2010, based on one 90 minute meeting, and stood by the decision he made at the time, despite Rev Flowers’ lack of banking experience.

In a scathing letter sent to FCA chief executive Martin Wheatley and seen by Financial Adviser, Mr Taber – who represented more than 15,000 retail bondholders during negotiations over the restructuring of the bank – said the former director of the FSA’s major retail groups division had misrepresented the regulator’s involvement in the restructuring of the bank.

He claimed Mr Adamson was incorrect in his assertion that the FCA did its best for bondholders, arguing that it did little to protect their interests as the Co-op Bank plunged into crisis.

Article continues after advert

He said: “It is clear from Mr Adamson’s evidence that the FSA was culpable for the position investors were put through by its negligent approval of a dysfunctional and incompetent bank board, followed by failure to act upon whistle-blowing concerns over Project Verde raised by the bank’s deputy chair.”

He said the then regulator’s stance, together with the regulatory waiver it issued to the bank in June 2012, which gave it an additional three years to get its house in order, led to the Co-op formally pursuing the disastrous Project Verde at a cost of hundreds of millions of pounds.

The FCA confirmed last week that it would be undertaking enforcement investigations into events at the Co-operative Bank, but a spokesman said it would not be commenting further on Mr Adamson’s testimony to the Treasury select committee.

Adviser View

Nick McBreen, financial planner for Cornwall-based Worldwide Financial Planning, said: “A 90-minute interview to establish someone’s financial credentials to do the job is questionable to say the least. We all expect a level of due diligence from the regulator, and this situation would suggest the job wasn’t done thoroughly.”