Regulation  

Flowers was coached ahead of FSA meeting

Giving evidence this week to the committee’s Project Verde inquiry, Rodney Baker-Bates, a former deputy chairman of the bank, said Rev Flowers did not have the requisite expertise for his position and often deferred to him and his fellow deputy David Davies on financial matters.

Mr Baker-Bates – who is a chartered accountant and has worked for several banks – said he had been a candidate for the chairmanship himself and could have rescued the bank. But he lost out to Rev Flowers, “who did very well in psychometric tests” – a statement that provoked laughter from the MPs on the committee.

Mr Baker-Bates added he had given Rev Flowers a “tutorial” ahead of Rev Flowers’ meeting in March 2010 with the Financial Services Authority’s major retail groups division director Clive Adamson when Rev Flowers took over as Co-op Bank chairman.

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Earlier this month, Mr Adamson, who is now the FCA’s director of supervision, told the committee Rev Flowers had been approved as chairman of the bank on the basis of a 90-minute interview with no additional checks into his background.

Mr Adamson also confirmed the FSA had suggested to Rev Flowers that he appoint two deputies with banking experience. However, both Mr Baker-Bates and Mr Davies said the regulator had never been in contact with them during their tenure, despite their clear concerns about Rev Flowers’ suitability.

Mr Baker-Bates, a former chairman of Britannia Building Society, added: “I believe things would have been very different had I been [Co-op Bank] chairman, and we would perhaps still have the Co-op Bank.”

Mr Baker-Bates eventually resigned from the board of Co-op Bank in July 2012 in protest at the board’s decision to press ahead with the doomed plan to buy more than 600 Lloyds Banking Group branches.

Co-op Bank, which is the subject of several investigations, including an internal inquiry led by former financial services secretary Lord Myners, is expected in March to announce significant losses in its full-year results.