Outlook John Mann, the Labour MP for Bassetlaw, got to the nub of the issue at an astonishing hearing of the Treasury Select Committee yesterday. He pointed out that while much has been made of how banking culture has gone badly wrong, the same could equally be said of the culture at Britain's financial regulators.
That was made abundantly clear at yesterday's session with Clive Adamson, who is now director of supervision at the Financial Conduct Authority but gave the green light to the appointment of Paul Flowers to chair the Co-op Bank while working at the FCA's predecessor, the Financial Services Authority (FSA).
Incredibly he claimed the appointment was the "right decision at the time" (it was 2009) because, after a 90-minute interview, he and his colleagues had decided that the Reverend Flowers could bring some order to an "unruly" board of 22 people. Well, the Rev was a school governor.
Now it's quite true that Mr Adamson couldn't have been aware of Mr Flowers' messy personal life, even though he had been alerted to a spent conviction for gross indecency. The Rev's apparent use of drugs, escorts, and, er, "inappropriate" pictures makes him look more like a Z-list celebrity than a methodist minister, local councillor and respectable scion of the Co-operative movement.
But even without knowledge of his foibles, the appointment looks highly questionable given that he was such a newbie to both banking and the boardroom.
It's not as if the regulator wasn't aware of the dangers of banks with weak boards and senior directors holding only limited banking experience. This, remember, came after the bailout of Royal Bank of Scotland – chaired by Tom McKillop, a chemist.
As for the regulator's worries about an unruly board, why did it not act on them by demanding rapid change, rather than leaving a greenhorn like Mr Flowers to do a pruning job?
This, after all, was a deposit-taking institution fresh from a transformative merger with Britannia Building Society. That would carry a huge risk at the best of times. With the UK only just emerging from the financial crisis, it was anything but the best of times.
The reality is that Mr Flowers' colourful private life, which has sparked such a furore and prompted such a confusing array of inquiries, is a side issue. Allowing his appointment would have been a bad decision even if he had been a saint. That should have been blindingly obvious to the regulator from the off.
Apparently about one in ten appointments didn't go ahead at that time as a result of concerns expressed by the FSA. If Mr Flowers measured up, this must mean the other banks were looking to appoint failed X Factor contestants.
Once again we have been given a picture of a regulator whose staff simply ticked the boxes and avoided taking tough – and potentially fraught – decisions.
Has this changed? That's what should worry us.
For those of us who believe Britain needs strong and effective financial regulation, what was really disturbing about yesterday's hearing was the inability of Mr Adamson, an apparently intelligent and articulate man, either to see his error when looking back or to learn from it. If his attitude is representative then we are in trouble.
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