Bank of England Official `Appeased' BCCI , Court Told

Article excerpt

A SENIOR OFFICIAL at the Bank of England was likened to Neville Chamberlain attempting to appease Adolf Hitler in his failure to prevent BCCI becoming one of Britain's fastest-growing banks in the 1980s, the High Court heard yesterday.

Peter Cooke, the former head of banking supervision at the Bank, chose to rely on regulators in Luxembourg for an assurance that BCCI was sound, even though he knew that the country's authorities were not able to police the group effectively, according to Gordon Pollock QC, acting for BCCI's liquidator, which is suing the Bank.

"One has the impression perhaps of Mr Cooke coming back from Luxembourg and descending the stairs of the aeroplane, wearing his bowler hat, carrying his umbrella and waving a piece of paper saying `no responsibility in our time'," Mr Pollock said.

Deloitte & Touche, BCCI's liquidator, is suing the Bank for pounds 1bn on the grounds that its officials failed to perform their public duty in regulating BCCI properly. The group collapsed in 1991, becoming the biggest failure in the sector ever, owing pounds 5bn to 70,000 creditors.

The high-profile case, which could take 18 months to hear, has already led to a string of embarrassing revelations about the Bank's inner workings and its attitudes towards fellow financial regulators around the world. …