Treasury inquiry announced into Co-op Bank turmoil as Paul Flowers bailed
It could produce uncomfortable findings for both last Labour government and current Coalition
An independent Treasury inquiry into the turmoil at the Co-operative Bank, including the appointment of Paul Flowers as its chairman, was announced tonight by Chancellor George Osborne.
As it will cover the last five years, it could produce some uncomfortable findings for both the last Labour government and the current Coalition administration.
The move followed the arrest of Mr Flowers, a 63-year-old Methodist minister, in connection with claims he bought and used class A drugs. He was being questioned by West Yorkshire police last night after being arrested in Liverpool and later bailed.
Amid mounting allegations about his private life, he has been suspended by the church and the Labour party, which he represented as a councillor until 2011 when "inappropriate but not illegal adult content" was found on his council computer.
Labour and the Tories have traded accusations over who was responsible for the bank coming to the brink of collapse because of a £1.5bn black hole in its finances.
The Treasury inquiry will range across how the bank ran up vast losses, its ill-fated merger with the Britannia Building Society in 2008, its failed attempt to acquire Lloyds branches seven months ago and how appointments were made to senior positions.
The probe will be led by an independent person appointed by the City regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
It will add to an investigation planned by the PRA and the FCA into whether there were adequate systems and controls in place to prevent the crisis at the bank.
It will also consider whether there was any wrongdoing by individuals, which could lead to fines and censures.
David Cameron has denounced the links between the bank, Mr Flowers and the Labour party. Tories have also pointed to connections between the Co-op and Ed Balls, the shadow Chancellor.
Ed Miliband, the Labour leader, retorted yesterday, accusing the Prime Minister of "cheap political points" and "unjustified smears".
Labour also seized upon a comment by the former Tory minister David Davis that Mr Osborne and the Treasury had "serious questions to answer" about the oversight of the bank in connection with its attempted acquisition of Lloyds branches.
- 1 British tourists 'murdered' in Thailand: Pair's bloodied bodies found naked on Koh Tao beach
- 2 Vivienne Westwood says 'Yes' to Scottish Independence by declaring: 'I hate England'
- 3 Welcome to Cameroon, where drinking Baileys can lead to imprisonment
- 4 Lego breaks out of the toy box and heads for the gallery
- 5 Vogue under fire for 'Big Booty' article
British tourists 'murdered' in Thailand: Pair's bloodied bodies found naked on Koh Tao beach
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Vivienne Westwood says 'Yes' to Scottish Independence by declaring: 'I hate England'
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
£400000 Per Annum: The Green Recruitment Company: Job Title: Energy Markets An...
£30000 - £35000 Per Annum Plus excellent benefits: Clearwater People Solutions...
£22000 - £23000 per annum: Randstad Education Bristol: We are currently recrui...
£35000 - £40000 Per Annum: Clearwater People Solutions Ltd: We are currently r...