Business analysis: Banking The BBA needs to address the issue of bankrupts, says Nils Pratley

Everyone's an ethical banker these days, aren't they? Aren't chief executives falling over themselves to proclaim that their organisations take seriously their responsibilities to society?

The Co-operative bank interrupted this pleasing narrative yesterday as it announced it would no longer offer basic banking services to undischarged bankrupts.

Before hissing at the Co-op's decision, listen to its reasons: it and Barclays are the only major banks offering the service to undischarged bankrupts; and, since these basic accounts are

essentially a cost to the provider, it's unfair for other banks to expect the duo to do all the industry's work in practising the principle of "inclusive banking".

It's a fair point, and one can understand why Co-op felt it had to act. It operates 330,000 basic bank accounts (those with no overdraft facility or cheque book but which offer access

to direct debits and standing orders) and almost a third have originated

out of some form of court order or bankruptcy.

Think of the Co-op's move, then, as an attempt to embarrass bigger rivals, such as Royal Bank of Scotland and Lloyds Banking Group, into pulling their weight.

Indeed, the Co-op says it will review its decision if others "genuinely perform on this issue".

But it's depressing that the fight should have to happen in public.

In a rational world, the matter would be settled quickly and quietly in a high-level pow-wow organised by the British Bankers' Association, the trade body which describes itself as "the voice of banking and financial services".

The BBA has plenty to think about these days - like how to recover its reputation after the Libor scandal - but surely it could spare 10 minutes to bang heads together on this issue?