You are here: Home - Saving & Banking - News -

Treasury launches review of supervision of Co-operative Bank

Written by: Paloma Kubiak
An independent review of the regulators which supervised the Co-operative Bank has been launched by the Treasury as the former bank chairman was today banned from the industry.

The review will look into the prudential regulation and supervision of the Co-operative Bank between 2008 and 2013, including the collapse of its bidding process to buy 632 bank branches from Lloyds Banking Group – known as ‘Project Verde’.

During this time, the bank suffered significant financial losses and barely survived complete collapse a year later.

John Glen, Economic Secretary to the Treasury announced the review and said it will aim to “understand what lessons can be learned”.

The Prudential Regulation Authority has appointed Mark Zelmer, who has over 30 years’ experience in financial services regulation, to carry out the independent review which is expected to run for a year.

Glen said: “We are committed to creating a stronger and safer banking system. A vital part of this is ensuring that our regulatory system can learn from past events. The launch of this independent review is a further demonstration of this commitment.”

In November 2013, the government announced it would direct the regulators to launch an independent review of the events at the Co-operative Bank and the circumstances surrounding them.

But at the time of the announcement, the government said it wouldn’t launch the review until it was clear it wouldn’t prejudice any actions the relevant authorities may take, including potential Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) enforcement investigations.

Given that the FCA has today banned former Co-operative Bank chairman, Paul Flowers, from the financial services industry, the independent review can now go ahead.

Flowers, who was chairman between April 2010 and 2013, was found to have sent sexually explicit messages and discussed illegal drugs using his work email account. He was also found to use his work phone to call premium rate numbers.

After stepping down, he was convicted for possession of illegal drugs.

The FCA found his conduct “demonstrated a lack of fitness and propriety required to work in financial services” and as such, banned him from the industry.

A Co-operative Bank spokesperson, said: “Today’s announcement relates to past events and historical issues running up to 2013. The investigation into the Bank itself was concluded and published back in 2015 and we are now focused on building a sustainable profitable bank for the future.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
nest egg
ISA shake-up proposed by cross-party working group

The ISA regime has been subject to considerable change in recent years and today a working group has called on...