The independent review into the events surrounding the financial
collapse of Co-op Bank has been published today.
The Treasury Committee will take evidence from Mark Zelmer, the
independent reviewer, on 30 April.
Commenting on the review, Rt Hon. MP, Chair of the Treasury
Committee, said:
“Although much has changed since the financial collapse of
Co-op Bank, this long-overdue review will aid the Committee in
its scrutiny of our financial regulatory system.
“The Treasury Committee will examine Mr Zelmer’s conclusions
when we take evidence from him on 30 April.”
--Ends--
Notes to Editors
- The
independent review is here. The response
from the Prudential Regulation Authority and the Bank of
England is here.
- The
Treasury Committee is scheduled to take evidence from Mr Zelmer
on the independent review on Tuesday 30 April at 10:00.
- On 22 November 2013, Rt Hon. MP, then Chancellor of the
Exchequer, announced that
there would be an independent review into ‘the events at Co-op
Bank and the circumstances surrounding them.’
- In 2014, the Treasury Committee published a
report into Co-op Bank's failed bid for the required
divestment of 632 branches of Lloyds Banking Group (known as
Project Verde). The report concluded that an independent
inquiry into events at Co-op Bank should consider:
- Whether the
FSA could or should have developed superior stress-testing
tools sooner than it did
- Whether
superior stress-testing tools would have led to Co-op Bank's
loan impairments being discovered sooner
- Whether
Co-op Bank's impairment profile—which appeared to differ from
that of other banks throughout the financial crisis—should have
led the regulator to inspect it more closely prior to 2012
- Why the
FSA's analysis on the Britannia merger failed properly to
account for the prudential risks attached to the Britannia
assets that have since been uncovered by the PRA
- Whether the
work provided by KPMG and JPMC on the Britannia merger met a
reasonable standard, in substance as well as form
- Whether the
FSA was made aware of the change made by Co-op Bank to the
accounting treatment for its IT platform replacement programme
in 2010, and whether the FSA should have foreseen and acted on
its consequences—that is, delaying the effect of the IT
programme on the bank's regulatory capital
-
Whether—given the conclusions of the independent inquiry on the
forgoing points and the FRC's investigation on the late
emergence of Co-op Bank's capital shortfall—Co-op Bank's Verde
bid could or should have been halted sooner
- What, if
anything, further can be learnt from the record of the
Government's contacts with Co-op Bank and Group, Lloyds Banking
Group, the regulator, UKFI and NBNK during the Verde bidding
process.
