HM Treasury, the UK government’s economic and finance ministry, has ordered the Prudential Regulation Authority (PRA) to probe its oversight of Cooperative Bank between 2008 and 2013.
The investigation will scrutinise the supervision of the Co-operative Bank over the five-year period during which the bank reached at the brink of complete collapse.
The independent probe will consider nine key aspects, which includes “assessing the actions, policies and approach of the FSA and the PRA as the institutions with statutory responsibility for the prudential supervision of the Co-op Bank” during the period 2008 to 2013.
The investigation will also focus on how the troubled lender failed in its bid to acquire 632 branches of Lloyds Banking Group in 2013.
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.”
Treasury CommitteeChair Nicky Morgan said: “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.”
The latest move by HM Treasury comes after the FCA announced that it has now completed its enforcement investigations into the Co-op Bank and related individuals.
The PRA named Mark Zelmer to carry out the independent review which has been approved by Glen. Zelmer has over 30 years of experience in financial services regulation and policy.