From Mr Jon Murphy.

Sir, It seems that “years of probes” into the Co-operative Bank’s downfall are hardly necessary (report, November 22) when Andrew Tyrie, chairman of the Treasury select committee, has already stated the root cause of the issues when highlighting the previous lack of banking expertise on the Co-op board. Seemingly the new regime is addressing this, and a prolonged analysis is a distraction.

More worryingly, this lack of industry knowledge extends to those who are developing the much-needed banking reform across the UK and Europe. As it stands, the huge task of developing new regulation has been seized by politicians, civil servants and academics, many of whom lack industry experience and do not have the knowhow to develop policies that are both effective and practical.

While politicians rush to issue winning soundbites about new initiatives, they consistently fail to address the detail. As a result, the industry has to deal with substandard regulation (European Market Infrastructure Regulation is now so watered down that you could drive a horse and cart through it) or endless delays (Dodd-Frank, Liikanen, Volcker, Vickers and Solvency II reforms have all stalled).

Complex definitions and in-depth market understanding are essential in formulating good policy. Yet we frequently hear politicians call for a ban on derivatives while failing to appreciate their use in the majority of fixed rate mortgages.

Assuming that politicians, who have a watchful eye on forthcoming elections, are best placed to develop new regulatory policies without listening to the people who will have to operate under them is both naive and misguided.

Jon Murphy, Executive Director, ea Consulting Group, UK

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