If the Britannia was a financial bucket case, how was it supervised and regulated? How did auditors sign off its accounts? Who carried out the due diligence on behalf of the Co-op Group/Bank? Did the City regulator oversee any of this?
We have already heard a lot about the appointment of Reverend Paul Flowers as chairman of the bank; heads should roll for this gross incompetence. The first victim of the well orchestrated assault on the Co-op Bank was the wider group itself, and to a large extent that was self-inflicted.
As soon as the scandal broke, the Co-op Group should have got rid of the bank before it contaminated the parent organisation and, in the process wider mutuals and the banking sector generally.
We are now left with a bank that is 20 per cent owned by the Co-op Group with hedge funds calling the shots. Yet, for reasons best know to the government and the City regulator, the remaining body can still pose as a ‘co-operative’.
As the cacophony of noise rang out, what Lord Myners and critics of the co-operative movement forgot was that mutuality meant that members and customers must always come first.
To most members and account holders, customer care is far more important than a huge profit on their investments. A friendly, honest, helpful face at the counter gives customers a renewed confidence that their life savings are in good hands.
These are basic qualities that cannot be replaced by computerised transactions, by call centres in cities thousands of miles away from Britain, nor by bright young executives armed with their business school MBAs looking to shoot out the lights.
Call this top-quality service what you like, compassionate capitalism, new idealism, ethical capitalism, it does not matter; what is important is how that service is delivered. The Co-op Bank started going wrong when Sir Mervyn and his senior executives took their eyes off the ball and started adopting the worst values of Lehman Brothers and the Sir Fred Goodwin-led Royal Bank of Scotland.
They failed to remember that that is not what their customers wanted or admired, and that the principal reason for becoming a Co-op Bank customer was because customers wanted a gentler, softer form of capitalism.
It is this belief that comes up against the values espoused by Lord Myners in his 185-page report on the future of the Co-op Group.
Instead of closing their eyes and committing mass suicide, senior Co-op officials should have faced down Myners, they should have called his bluff, they should have reminded him of the terrible state of most retail banks’ balance sheets.
