One of the big stories in the UK this week has involved the interesting shenanigans of Paul Flowers, the erstwhile head of the Co-operative Bank. There have been plenty of distasteful and disreputable details to pore over. The Government, of course, has pledged to get to the bottom of the matter.
Meanwhile, the other banks must have rubbed their collective hands together with glee. This current scandal should deflect some of the spotlight’s glare away from them. Even better, they will be able to point out joyfully that this ‘ethical’ bank with a social conscience (breathe it, who dares) has been steered as confidently onto the rocks as all of the others.
They will say this, you can be sure, but it will miss the point. For 150 years, the Co-op Bank demonstrated that a bank can be run perfectly well without treating its customers as marks to be wrung dry. It showed that it was possible.
Its demise was brought about, not by greed and recklessness, but by one ill-advised decision, to merge with the Britannia Building Society. Some of this ill-advice came directly from the banking regulator. This fact is not aired as often as it once was.
The regulator, in fact, was considering using the Co-op as an example of how to re-model the banking system. How the city folk must have hissed!
So, before banks such as Lloyds and RBS start preening themselves, they would do well to remember how long a bank that acted with decency, and considered its customers opinions, managed to prosper. They may well be glad that they no longer have the Co-op as an example of what they could achieve if they tried, but some of us have long memories.
They have no right to feel smug just yet.
- Former Co-op bank chief and Methodist minister caught on camera buying crystal meth, crack and ketamine (standard.co.uk)
- Sleaze shame: The fall from grace of Co-op Bank boss and reverend Paul Flowers (express.co.uk)
- Treasury orders inquiry into Co-op Bank failings (telegraph.co.uk)
- Co-op Bank’s Britannia tie-up defended (standard.co.uk)