The Financial Conduct Authority is investigating the role of former senior directors at the troubled Co-operative Bank, according to reports.
Co-op’s senior executives have faced a series of grillings by the Treasury select committee in recent months over a failed deal to buy 632 Lloyds Banking Group branches, known as ‘Project Verde’, and a £1.5bn capital shortfall.
The former Labour councillor was caught on video by the Mail on Sunday buying crystal meth and crack cocaine.
The Telegraph reports the FCA is investigating roles of senior individuals in the run-up to the capital shortfall being uncovered in June 2013.
According to the paper, the probe is focusing on whether there were any regulatory breaches by the directors in relation to the regulatory capital position of the bank and the way that provisions were accounted for in relation to loan impairments.
Yesterday, Prime Minister David Cameron called for a regulatory inquiry into the appointment of Flowers.
Speaking at Prime Minister’s Questions yesterday, he said: ”The Chancellor will be discussing with the regulators the appropriate form of inquiry. There are clearly a lot of questions that need to be answered.
“Why was Reverend Flowers judged suitable to be chairman of a bank? Why weren’t alarm bells rung earlier, particularly by those who knew? It will be important that if anyone does have information they provide it to the authorities.”