Published on 18 Nov 2013 Sections ,

Co-op’s Paul Flowers not interviewed by regulators

Reverend Paul Flowers was not interviewed by regulators when he was appointed Co-op Bank chairman, the financial watchdog reveals, as it renews calls for checks on senior City appointments.

Mr Flowers, who chaired the bank for three years until this June, was caught apparently paying for illegal drugs just days after being grilled by the Treasury select committee over the bank’s poor performance.

MPs questioned whether he was qualified to chair a bank, leading to queries over how his appointment had been approved by the financial watchdog.

However, in a statement on Monday the Financial Conduct Authority (FCA) said that as per protocol, it had not interviewed Mr Flowers on his appointment as chairman because he was already a member of the board.

The FCA said: “Paul Flowers underwent the appropriate interview process when originally coming onto the Co-op board.”

‘Personal accountability’

During the select committee hearing, chairman Andrew Tyrie asked: “Was there anything in your background that prepared you to chair a sizeable bank with assets of £47bn?”

Mr Flowers replied that he had worked for a bank for four years following university, adding: “I took the exam of the Institute of Bankers. I completed part one and the best part of part two of those exams before I became a Methodist minister.”

Co-Op Bank issued a statement in 2010 annoucing Mr Flowers’ promotion to chairman and detailing his background.

Its statement said: “As well as being a Director of the Co-operative Group Board since 2008, Paul is a Methodist minister, an elected member of the City of Bradford Metropolitan District Council and has held a number of varied and senior positions within the voluntary sector.”

It made no mention of any banking background.

Following the committee hearing last week, the FCA backed calls for a “Senior Persons Regime” to ensure that important banking responsibilities are assigned to the right people so that they can be held accountable. The regime was proposed by the Parliamentary Commission on Banking Standards (PCBS) in June.

The FCA said in a statement on Monday that it “supports the proposal by the PCBS to introduce a Senior Persons Regime to ensure personal accountability and that people with the right skills and attributes hold positions of importance.”

‘Stupid and wrong’

Meanwhile, Mr Flowers has apolgoised for doing “things that were stupid and wrong” after the Mail on Sunday posted a video online apparently showing him handing over £300 for illegal drugs.

Mr Flowers, a Methodist minister, said: “This year has been incredibly difficult, with a death in the family and the pressures of my role with the Co-operative Bank.”

A Methodist Church spokesman said: “We expect high standards of our ministers and we have procedures in place for when ministers fail to meet those standards.

“Paul is suspended from duties for a period of three weeks, pending investigations, and will not be available to carry out any ministerial work. We will also work with the police if they feel a crime has been committed.”

The Co-op has been trying to plug £1.5 billion gap in finances which was discovered following the purchase of the Britannia Building Society and abortive plans to buy hundreds of Lloyds branches.

Article topics