Mark Kleinman broke the news on Sky that Dame Deirdre Hutton is in the running to be the new chair of the BBC. Kleinman is well-connected and always on the money, but I must admit to being staggered by the revelation of this potential appointment. Hutton is now reported by the FT to be in the final three for the post along with Sir David Clementi, a former deputy governor of the Bank of England, and John Makinson, chairman of Penguin Randon House. If it is true about Hutton’s shortlisting then the government has gone bananas or Number 10 simply has no idea what it is doing. It must be a mistake, surely? It is certainly worthy of a subplot in satirical novel about the revolving door that is the British Establishment.

This is not to impugn New Labour Gordon Brown favourite Dame Deirdre, who was dubbed “Queen of the Quangos” because she has chaired or run so many public bodies since 1980. I am sure she is a dedicated professional public servant. Her first gig was at the Glasgow Chamber of Commerce and from there she has been at quango after quango.

But there is no getting away from it. She was also deputy chairman of the Financial Service Authority from 2004 to 2007 during the disastrous run up to the financial crisis. This is the British equivalent in the financial crisis of having been a senior officer on the bridge of the Titanic when it steamed at high speed into the iceberg. The idea that a Conservative Prime Minister would think – unless she had been badly advised by people at the Department of Culture – of choosing someone to chair the BBC with all that FSA baggage is just bizarre. Imagine the outcry; imagine the press coverage.

The FSA was a calamitous organisation, created by Brown’s flawed overhaul of financial regulation. There is an account of what happened in my book – Making it Happen – on the rise and fall of RBS. All of the senior people there are tainted to varying extents by the epic failure to regulate the banks sufficiently and to stand up to a government that was more interested in knighting bankers than in keeping tabs on them.

Hutton left the FSA in December 2007 less than a year before the worst of the crisis hit, and then she reappeared chairing the Civil Aviation Authority. “I don’t know anything about aeroplanes,” she was reported as saying, but concluded that she had a skill for making organisations work properly. The notion of the FSA having worked even remotely adequately before 2008 is a joke.

Not much in the news has the ability to shock this year. But I am genuinely agog if Theresa May wants to make the former head of the calamitous Financial Services Authority chair of the BBC.