Any other business: Oh dear... perhaps Standard Chartered isn't as dull as it looks

The cautionary tale of the Co-operative Bank, its black hole and its naughty chairman has recently taught us that if a financial institution has the reputation of being dull, earnest and set in its ways, it probably isn’t. The collapse last year of Switzerland’s oldest private bank, Wegelin & Co — whose boss once claimed that being small and provincial made it ‘easy to avoid the deadly emotions of greed and fear’ — was another example. Attention now turns to Standard Chartered, an overseas commercial bank that has long had the reputation of sticking cautiously to the mode of business in which it has historic roots, notably in Asia, and has seen off repeated takeover approaches from others jealous of its franchise. Its chief executive, Peter Sands, in post since 2006, is widely regarded as a safe pair of hands; its chairman, Sir John Peace, bears no resemblance at all to the Revd Paul Flowers; its balance sheet looked relatively comfortable throughout the bad years — and a big fine for US sanctions-busting in 2012 was passed off as an unfortunate blip.

But suddenly the bank has announced the departure of two key executives below Sands and is under fire from a short-selling bond player, Carson Block, who claims it is sitting on piles of toxic loan assets. Other City voices mutter that Standard Chartered looks a lot less dull these days, and may need a steadying rights issue; the shares are down 30 per cent. It would be sad if all this turns out to be anything more than a passing flurry; but the lesson of the past five years is that the banking world is full of skeletons and surprises, against which the jumpiness of professional investors is an unreliable early warning system but one we should monitor all the same — and which also serves to keep regulators on their toes.