Co-operative Bank is censured but spared £120m fine
THE Co-operative Bank has been censured by financial regulators over failings surrounding its near-collapse but was spared a fine of £120 million.
A probe by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) found there had been “serious and widespread failings” in the way the lender was run from July 22, 2009, to December 31, 2013.
The PRA found flaws in the way the lender assessed risk, potentially weakening the firm and its resilience, as well as deficiencies in failing to keep the board “apprised of key issues”.
It added the bank “had a culture which encouraged prioritising the short-term financial position of the firm at the cost of taking prudent and sustainable actions for the longer-term”.
The report also said the lender failed to deal with regulators openly.
It said the failings were “sufficiently serious to warrant a substantial financial penalty” but the PRA said the fine – which would have been about £120 million – would not help its aim to promote the “safety and soundness” of firms it regulates.
PRA chief executive Andrew Bailey, deputy governor of the Bank of England, said: “Firms must have in place strong controls and sound risk management as operating without them undermines safet y and soundness.
“Co-op Bank’s failings stand out both for the duration and seriousness of the risk management and control deficiencies uncovered.
“This was compounded by a lack of openness with their regulator. These were serious transgressions.”
The bank nearly collapsed in 2013 after a £1.5 billion hole was discovered in its balance sheet and had to be rescued by bondholders including US hedge funds after dragging the wider Co-operative group to a £2.5 billion loss.
Co-op Bank chairman Dennis Holt apologised on behalf of the bank, adding it was “a significantly stronger organisation today under the leadership of the current senior management team”.
He said: “The bank has been co-operating fully with the regulatory authorities and the board fully accept the lessons that need to be learnt, but it is important to remember these are not a reflection of how the Bank is run today.
“They relate to historical events and legacy issues and were not decisions made by the current senior management team.” THE sounds and colours of Edinburgh’s Military Tattoo filled the streets of Glasgow as performers from the event paraded through George Square.
More than 600 drummers, dancers and pipers from the showpiece military event formed a procession through the city to promote the Tattoo, which runs in Edinburgh until August 29.
Glasgow Provost Sadie Docherty took a salute from the performers at the City Chambers as they wound their way round the Square.
The world-famous event has an East Meets West theme this year.
Tattoo chief executive and producer Brigadier David Allfrey, said: “We are pleased to offer both locals and visitors an opportunity to enjoy some of this month’s breathtaking production with its spectacular multi-talented cast.”