James Moore: Turner's candour may shut Bank door. Maybe he is better suited to Barclays

Lord Turner may also be right in his analysis that free banking has to end

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The Independent Online

Outlook Lord Turner seems to have views on just about everything, and likes nothing better than to expound upon them. That might just kill off his chances of becoming the next Governor of the Bank of England.

Yesterday the chairman of the Financial Services Authority spelled out what he thinks should happen to the banking industry and to regulation in the wake of the former's high crimes and misdemeanours.

The Right has never much cared for him, and he antagonised it more by voicing his opposition to financial watchdogs being charged with ensuring competitiveness in the City.

He is quite right: forcing regulators to take competitiveness into account when making decisions leads to the sort of softly-softly light-touch oversight that only the bonus boys in the City think is a good idea now.

Trouble is the Conservatives have been banging on about this for years, ever since the FSA was created with their reluctant connivance. It might be an example of muddle-headed pre-financial crisis thinking but it is also an ideologically motivated article of faith with them.

Where Lord Turner may also be right is in his analysis that free banking has to end if we are to get the sort of competition people want to see in the retail banking sector, the sting in the tail of yesterday's lengthy oration. Free banking is almost unique to Britain. To make it pay, banks have resorted to imposing sneaky, and sometimes ruinous charges on those who slip up by failing to remain in credit. And by selling sneaky, rip-off products such as payment protection insurance.

Faced with that, and the inevitable fines and opprobrium it leads to, is it any wonder that new players are reluctant to join the party?

Theoretically, our financial watchdogs could force a change to this situation, perhaps by banning cross-subsidies and forcing banks to charge. They'd actually quite like that, but it would be politically suicidal at a time when the electorate is bleeding from cutbacks, wage freezes and inflation.

Lord Turner was on even shakier ground with his analysis of the regulator's past performance. He insisted, for example, that the FSA couldn't have spotted the Libor fixing scandal in its early phases. It would have been "prohibitively expensive" to police it, requiring armies of staff. Which ignores the fact that placing cleverer staff in a culture that encouraged them to peer into the City's dark corners could have worked wonders.

He claims the regulatory architecture pre-crisis was a mess but doesn't seem to see that the FSA and its bosses mucked things up repeatedly. Nor does he acknowledge any personal failings. Well, no matter. His candour on so many subjects won't go down well where it counts. Don't expect him to ride into Threadneedle Street on a white charger.

Still, he does have a formidable intellect and much to offer. If the Bank is out, perhaps there is a better place for his undoubted talents: as the new chairman of Barclays, where he could put his call for a leadership and a change in culture into effect.