Co-op bosses face regulator probe following near collapse last year

Senior management at embattled bank the Co-operative face fines and lifetime bans from operating in financial services over the near collapse of the lender last year.

Two investigations have been announced, one by the Prudential Regulation Authority and another by the Financial Conduct Authority, which will examine former senior staff conduct in the run up to the bank’s £1.5bn bailout.

The bank was criticised by investors for reporting a healthy capital position shortly before the black hole in its finances was discovered. Regulators have blamed the bank’s 2006 merger with Britannia Building Society for the shortfall.

Ex-chairman Paul Flowers will be among those scrutinised in the investigation. Flowers left his position last year and has since been arrested over drug allegations. The scandal forced overall Co-operative group chairman Len Wardle to resign.

The investigations could take several months to complete, which will mean that a third investigation into the bank, commissioned by George Osborne in November will be delayed until the FCA and PRA reach their verdict on the case.

Now read:

Social Bookmarks