Co-op: the real fraud is ‘ethical banking’

In the past few days, UK news has been full of the peccadilloes of former Co-operative Bank chairman Paul Flowers. Not only has the right-on bank he ran basically been bankrupted, and narrowly bailed out by being flogged off to hedge funds, but Flowers – a Methodist minister - has been caught buying illegal drugs, including cocaine. Worse, it has become apparent that the financially clueless Flowers had no background in banking whatsoever; his appointment to the top job at the Co-op was an entirely political one.

But Flowers is merely an amusing sideshow. It is the Co-op Bank’s audacious reinforcement of anti-business sentiment and its bashing of its competitors’ practices that is truly emetic. Here is the Co-op’s description of itself: ‘The Co-operative is a unique family of businesses owned by our members and led by our principles. From community projects to a share of the profits, renewable energy to Fairtrade products, we believe that when the benefits are passed around, it’s good for everyone. Our online TV channel gives you the chance to see our community projects come to life and learn more about our values and principles.’ Yuk.

The Co-op even ran adverts in 2009 featuring Bob Dylan’s 1960s counter-culture protest song ‘Blowin’ in the Wind’ to promote the ethical stance of all its businesses, including banking. The ad, dreamt up by mainstream agency McCann Erickson, traces the wind-blown journey of a dandelion clock being tossed around between windmills, Fairtrade farms and Icelandic icebergs. The message we were meant to swallow was that the Co-op is uniquely green, caring and ethical.

Well, the Co-op’s self-righteousness has been trumped. And one has to wonder why the likes of BBC business editor Robert Peston were so soft on the Co-op for so long. Did the media share the Co-op’s prejudices and digest its hype, while they bashed its rivals? – a real fraud

It gets more serious when one questions the role of other players. Reverend Flowers might have been a loose canon (pun intended), but where were the financial regulators, Flowers’s fellow chairmen, the Co-op board and other people who should have known and cared, including media analysts and politicians? They seemingly had no idea, no interest anyway, or worse, no expectation that a bank’s chairman (or woman) ought to have some idea what they are doing.