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
News
news

Emergency call 'started off dumb, but got pretty serious'

News
people

Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'

Arts and Entertainment
JK Rowling is releasing a new Harry Potter story about Dolores Umbridge
booksJK Rowling to publish new story set in wizard's world for Halloween
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites those Star Wars rumours
PROMOTED VIDEO
News
Russell Brand was in typically combative form during his promotional interview with Newsnight's Evan Davis
people

Thought you'd seen it all after the Jeremy Paxman interview?

Arts and Entertainment
On The Apprentice, “serious” left the room many moons ago and yet still we watch
tv

Greatest mystery about the hit BBC1 show is how it continues to be made at all, writes Grace Dent

News
i100
Life and Style
tech

Voices
Funds raised from the sale of poppies help the members of the armed forces with financial difficulties
voicesLindsey German: The best way of protecting soldiers is to stop sending them into conflicts
Arts and Entertainment
A scene from David Ayer's 'Fury'
film

"History is violent," says the US Army tank commander Don "Wardaddy" Collier

News
ebooksAn unforgettable anthology of contemporary reportage
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

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

CTO / Chief Technology Officer

£100 - 125k: Guru Careers: A CTO / Chief Technology Officer is needed to join ...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker