UK Government Launches Independent Review Into the Prudential Supervision of the Co-operative Bank

HM Treasury has directed the Prudential Regulation Authority to conduct an independent investigation into the prudential regulation of the Co-operative Bank plc during the period 2008 to 2013. HM Treasury is empowered to require the Financial Conduct Authority or PRA to undertake investigations where it considers that such an investigation is in the public interest and the relevant regulator has not launched an investigation on its own initiative. The investigation will consider the actions, policies and approach of the Financial Services Authority and one of the successors to its functions, the PRA, during their respective periods in charge of prudential supervision, including the withdrawal by the Co-operative Bank from the bidding process to purchase bank branches from Lloyds Banking Group (known as Project Verde).

HM Treasury’s action follows confirmation by the Financial Conduct Authority that it has concluded enforcement investigations into the Co-operative Bank. On the same day, the FCA announced that Paul Flowers, former Chair of the Co-operative Bank, has been banned from the financial services industry on the grounds that he is not a fit and proper person to perform functions in relation to any regulated activity.

View the Government’s announcement.

View the Direction to the PRA.

View the FCA’s final notice.