Treasury announces launch of independent review into Co-op Bank

The new review follows today’s announcement by the FCA that it has now concluded its enforcement investigations into the Co-op Bank and related individuals.

On 22 November 2013, George Osborne, then Chancellor of the Exchequer, announced an independent review into the events surrounding the financial collapse of Co-op Bank.

The review will look into the prudential supervision of the Co-operative Bank during a significant period for the firm, including its withdrawal from the bidding process to purchase 632 bank branches from Lloyds Banking Group, known as “Project Verde”, in 2013.

The review will also look at the actions, policies and approach of the Financial Services Authority, and latterly the PRA, as the institutions with statutory responsibility for the prudential supervision of the Co-op Bank during the period in question.

As recommended by the TSC, the review will have full access to all relevant documents and correspondence, including the record of government contacts concerning the Lloyds “Verde” bidding process.

Economic Secretary to the Treasury, John 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."

Nicky Morgan, Chair of the Treasury Committee, commented: “The launch of the independent inquiry into Co-op Bank – more than four years after it was announced – is welcome; but it is hugely overdue. Whether or not my letter to the FCA was a prompt to action, the review must now be completed in good time.

“Although much has changed since the events in question, a forensic examination of the circumstances of Co-op Bank’s failure will no doubt yield important lessons for the financial regulators.

“The Committee will want full transparency on the findings of the investigation, and I will be writing to Mark Zelmer setting out our expectations.”