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FCA and PRA to investigate Co-op Bank’s £1.5bn capital black hole

The FCA and Prudential Regulation Authority are launching enforcement investigations into the Co-operative Bank.

The Co-op Bank was forced to withdraw a bid to buy 632 Lloyds Banking Group last year when it discovered a £1.5bn capital black hole.

The PRA investigation will consider the role of former senior managers. No further information will be provided on the investigation until the legal process has concluded and an outcome has been reached.

The PRA and FCA investigations are the latest in a long line of other inquiries into the Co-op Bank’s problems including an internal review, an independent Treasury-commissioned inquiry and a Treasury select committee inquiry into the failed Lloyds’ branches bid.

The independent review will only take place once regulatory investigations are complete and will look into all issues around the bank.

FCA director of supervision Clive Adamson is being grilled by MPs tomorrow morning over his role in supervising the Co-op Bank’s troubles.

There is also a police investigation into former Co-op Bank chair Reverend Paul Flowers over drug allegations last year.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. That should take all of a good hours conversation with Griffiths-Jones (ex KPMG) !! they could even do it over a cup of tea in the canteen @ budgie tower block !!

    Probably find out that KPMG were more than happy to take the 7.5 million a year fees they charged the co-op for their “very robust” (haha) auditing services !!

    “Carpet swept and under” spring to mind

  2. There is a serious problem over timing. These inquiries can role on with regulators using them as a reason not to comment

  3. So of what value are the regulator’s half-yearly RMA returns and accounts if a black hole went undetected until it had ballooned to £1.5Bn and the Co-op realised it was in sherbert of the deepest kind?

    Never mind ~ the RDR will sort out all sorts of things like this and we’ll all live happily ever after in a world in which nothing ever goes wrong.

  4. GP Styles (GPS Economics) 6th January 2014 at 4:34 pm

    If it is anything like the HBOS report I would guess we might see a report by around 2021. Time is a great weapon for regulators, lenders and politicians alike…. not much help to customers and investors though.

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