Conservative MPs have attacked the FSA for approving former Co-operative Bank chairman Reverand Paul Flowers.
Flowers, who was Co-op Bank chair from March 2010 to June this year, appeared before the Treasury select committee last week to answer questions on his role in the collapsed deal to buy 632 Lloyds Banking Group branches.
The deal fell apart earlier this year, and in June the bank revealed a £1.5bn capital black hole caused by poor performing commercial loans.
The former Labour councillor was caught on video by the Mail on Sunday buying crystal meth and crack cocaine just days after his appearance.
Labour and the Methodist church have both suspended the minister and he has apologised for his “stupid and wrong” actions.
Speaking to the BBC today, TSC chair and Tory MP Andrew Tyrie said the FSA’s process for vetting bankers had been “a complete disaster”.
He says: “It was nothing more than a massive bureaucratic, box-ticking exercise.
“There certainly was a heap of regulatory activity but a lot of it was for display purposes only – back-covering, box ticking that satisfied banks and regulators, but achieved little or nothing to protect customers or the shareholders of banks.”
Speaking to Money Marketing, TSC member and Tory MP Mark Garnier says: “The guy is clearly incompetent. Forget the drugs stuff, when we interviewed he didn’t even know the size of the Co-op Bank’s balance sheet.
“The Treasury committee will be asking how the hell the regulator signed this guy off. He was clearly way, way out of his depth. He didn’t even know anything about current affairs never mind the institution he ran.”