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
people

Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
Voices
'Irritatingly Disneyfied': fashion vlogger Zoella
voicesVicky Chandler: Zoella shows us that feminism can come in all forms
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
people

Sport
nflAtlanta Falcons can't count and don't know what the UK looks like
News
i100
Arts and Entertainment
High notes, flat performance: Jake Bugg
music

Review: Despite an uphill climb to see Jake Bugg in action, his performance is notably flat

News
The Putin automaton will go on sale next month in Germany
videoMusical Putin toy showing him annexing Crimea could sell for millions
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

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

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

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London