13 January 2014
Regulator FCA’s director Clive Adamson has expressed that he does not regret appointing Paul Flowers.
When asked by inquiry chair Andrew Tyrie if he regretted having approved the appointment of Flowers, Adamson said: ‘I stand by the decision I made at the time.’
He went on further to say, ‘I do not think it was a mistake in terms of the decision that I made at the time with the information I had’, when asked to clarify whether he felt he had made a mistake or not.
Flowers was described to be ‘articulate’ and ‘cogent’ by Adamson, when defending his decision, which saw Flowers appointed as, initially, non-executive chairman in 2009 and in 2010, chairman of the board of Co-op Bank.
While Adamson has defended his appointment of Flowers, both regulators, the FCA and Prudential Regulatory Authority (PRA), have announced the commencement of their own enforcement investigations.
Both regulators have stated they will look in to the Co-op Bank’s ‘decisions and events up to June 2013 ... [as well as] consider the role of former senior managers’.
Flowers’ lack of experience came to light in June 2013 when a £1.5 billion hole was discovered in the Coop Bank’s balance sheets. In an inquiry regarding the hole, Flowers did not know the size of the bank’s balance sheets or how much it was lending, which gave rise to questions of his competency in his role.
Drug allegations later in the year where he was filmed buying crack cocaine and crystal meth further fuelled questions of competency.
As a result, the Co-op Bank is currently the subject of six investigations – three internal reviews; one Treasury-commissioned inquiry; and FCA and PRA enforcement investigations.