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 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 2 Brazil vs Germany World Cup 2014: In defence of Mesut Ozil - the Arsenal midfielder works magic in the shadows
- 3 Do you know this man? Amnesia sufferer found in park pleads for help in identifying who he is
- 4 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
- 5 Tony Abbott embarrasses Australia by praising Japanese WWII military, ‘getting on the sake’ and posing for ‘crotch-shot’ photo opportunity
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Jennifer Lawrence face palms Emma Watson at Christian Dior show in Paris
Mick Jagger denies being World Cup curse and reason for Brazil’s embarrassing defeat
Gingers face extinction due to climate change, scientists warn
Do you know this man? Amnesia sufferer found in park pleads for help in identifying who he is
Sustained immigration has not harmed Britons' employment, say government advisers
British jihadist calls for 'flag of Islam' over Downing Street and Buckingham Palace
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
There’s a nasty smell in the political air – and it’s coming from the Tories
£45000 - £60000 per annum + competitive: Progressive Recruitment: Exciting opp...
£30000 per annum: Harrington Starr: A global leader in trading platforms and e...
£28000 per annum: Harrington Starr: A fast growing consultancy to the financia...
£30000 per annum: Harrington Starr: Technical Support Analyst - Liverpool Stre...