Another banker fined, while the Co-op hires a cleaner

 

An embarrassing week for the British banking industry deepened yesterday as the troubled Co-operative Group called on a key player in the 2008 financial crisis to conduct a root-and-branch review – and a leading player in another bank meltdown was hit with a £30,000 fine.

The Co-op has brought in the political and City heavyweight Lord Myners – Labour's City minister at the time of the crisis – to review the way the business is run and sit on its board as senior non-executive director. He will chair a review of the 160-year-old group's governance and democracy and become the first outsider on the board.

His appointment follows the near-collapse of the Co-op Bank and its subsequent "bail-in", under which it will be 90 per cent owned by its bondholders. It also follows the resignation of the Co-op Group chairman Len Wardle and the arrest of the former Co-op Bank chairman Paul Flowers over drug allegations. It came as it emerged that insurer Legal & General had entered the fray for the Co-op's general insurance arm, appointing Goldman Sachs as an adviser.

Meanwhile Bradford & Bingley's former finance director, Christopher Willford, was fined over the lender's botched £400m rights issue in 2008. The Financial Conduct Authority (FCA) said he had failed to alert the board to potential risks such as details about profits, mortgage arrears and repossessions at the height of the credit crisis. B&B's mortgage book was eventually taken on by the state and its savings business sold to Santander.

The latest developments follow big fines for two taxpayer-backed banks, Lloyds and Royal Bank of Scotland, which will pay a total of £60m for mis-selling and sanctions busting. Co-op Bank was fined this year for PPI mis-selling.

Lord Myners said of the appointment: "I'm drawn to situations like this and I'm absolutely confident we can sort this out. The underlying business, the customer proposition, is absolutely tremendous. I'm doing it because the Co-op matters. It matters to me and it matters to its nine million members."

Lord Myners, who will be paid just £1 a year, said he considered the bank's problems, including a £1.5bn hole in its balance sheet, sorted out. "You can put a tick against that," he said.

George Osborne has ordered an independent inquiry into the bank and it faces probable probes by financial regulators. Separately, the Co-op has commissioned an independent "forensic" review into what went on at the bank.

That is expected to report around the same time as Lord Myners' governance review, in time for next May's annual meeting. Euan Sutherland, the new chief executive of Co-op Group, said: "What our customers, colleagues and wider membership base needs is an organisation and a business that they can be proud of again, and I believe that Paul [Myners] has a key role to play in helping us deliver that."

Mr Sutherland is due to present his own review of the Co-op's sprawling businesses early next year.

The FCA said B&B's Mr Willford had received information on 16 May 2008 that suggested B&B's financial outlook might be weaker than expected. He failed to raise this immediately with the board so that it could investigate and ensure that financial information provided to shareholders about the rights issue on 19 May was correct.

The information Mr Willford received showed that bad mortgage debts and repossessions had risen, while the difference between the rates B&B charged to, and received from, its customers had fallen. This could have led to a shortfall in profits, the FCA said.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
people
News
A boy holds a chick during the Russian National Agricultural Exhibition Golden Autumn 2014 in Moscow on October 9, 2014.
news
Life and Style
love + sex
Sport
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle v United 1 player ratings
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Sport
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
ebooks
ebooksA special investigation by Andy McSmith
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Arts and Entertainment
Seth Rogan is one of America’s most famous pot smokers
filmAmy Pascal resigned after her personal emails were leaked following a cyber-attack sparked by the actor's film The Interview
News
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
people
Life and Style
A statue of the Flemish geographer Gerard Kremer, Geradus Mercator (1512 - 1594) which was unveiled at the Geographical Congree at Anvers. He was the first person to use the word atlas to describe a book of maps.
techThe 16th-century cartographer created the atlas
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot