A couple of recent episodes have dented my confidence in the City's chief regulator, the Financial Services Authority (FSA). Both were trivial in themselves. One was summed up in a facial expression lasting a couple of seconds. The other was a routine brush-off by an official. But both were symptomatic of a disease running through the entire organisation.
One incident occurred the other day at the Treasury Select Committee, where John Tiner, the powerful head of the authority's consumer division, was being questioned by MPs about a £13bn investment scandal - the debacle over so-called split capital investment trusts.
In the course of being questioned, Tiner made clear by body language, word and gesture his contempt for Stephen Alexander, the lawyer representing 1,000 burnt investors. He called him an ambulance chaser. He grimaced at the very mention of the lawyer's name. He appeared far more hostile to Alexander than to the fund managers, stockbrokers and financial advisers primarily responsible for the affair.
I have some sympathy with Tiner. Alexander is out to sue anyone with deep pockets - and the FSA, backed by HMG, has deeper pockets than most. Yet in any ranking of culpability, the FSA surely comes low down in the pecking order.
Even so, the FSA came across as unsympathetic to the 50,000 private investors who have lost money in splits. It is worrying that the body charged with investor protection appears to regard a representative of investors as public enemy number one. The FSA - that day in parliament, anyway - looked like a body more concerned with covering its own backside than pursuing the perpetrators of one of the biggest financial scandals of recent times.
The second episode was the FSA's response to accusations of bribery made against investment bankers on Wall Street. Goldman Sachs, Credit Suisse First Boston and others are under investigation by the US Congress for allegedly offering bribes to influential chief executives in return for favours. They fiercely deny any wrong-doing. The alleged bribes were allocations in hot floats during the dotcom boom - then a surefire way to make money. The favours allegedly sought in return were lucrative investment banking mandates.
We don't know that anything similar was happening this side of the Atlantic. But the same banks operate here as there. High-tech companies rocketed with the same vast premiums here as there. And there were lucrative mandates to be won in London as in New York. The case certainly seems worthy of scrutiny.
Yet when I put this to the FSA four weeks ago, I was expressly told that it was not interested. How investment bankers chose to allocate shares was entirely "a commercial decision", an official repeatedly told me. It was nothing to do with the FSA.
The FSA chairman, Howard Davies, has since done a U-turn, announcing plans to investigate "spinning" - the financial community's euphemism for this type of bribery. He now says spinning could breach principles that bankers have to respect, including "the requirement to act with integrity, the need for proper standards of market conduct, the need to treat customers fairly and the need to manage conflicts of interest".
What stays in my mind, however, is not Davies's road-to-Damascus interest in the matter, but rather the energy and stubbornness with which his officials three weeks earlier denied that they had any interest in the allegations or any duty to investigate them. At the FSA, there always seems to be a good reason not to investigate possible wrong-doing. It's a cultural thing. The FSA is staffed by intelligent, hard-working, public-spirited officials. But something is missing. There doesn't seem to be the appetite to go after scalps, to nail the fraudsters.
That hunger has to start at the top. Eliot Spitzer, the New York attorney -general who is gunning for Wall Street, has been derided as a politician out to make a name for himself. But his crusading zeal - however self-interested - is surely preferable to the jobsworthian inactivity of Canary Wharf.
Speaking of the split capital scandal, I am tired of hearing financiers plaintively claim that they "stress-tested" the investment products that have since imploded. They modelled the storms that occasionally blast through the financial markets, they moan, but no one could have foreseen this bear market.
What self-serving rubbish! The current bear market is as nothing compared with the crashes of 1929 and 1974. If they had put either of those percentage share price slides through their computer models, it would have been plain that the products they were labelling as low-risk were nothing of the sort.
Patrick Hosking is deputy City editor of the London Evening Standard
