UK: Lawmakers call on FCA to pick up slack for Co-op Bank demise

In a 123-page report released by the UK Parliament’s Treasury Select Committee, lawmakers placed blame on the demise of Co-operative Bank following a failed buyout of Lloyds assets on shortcomings of both the FSA – replaced by the Financial Conduct Authority – and the Co-op Bank’s auditor, KPMG.

The report is now calling on the FCA to pick up the slack of its predecessor, which the Committee found to have failed to adequately examine the role of KPMG in the bank’s near-collapse.

The Co-op bank came under bondholder control last year after a failed takeover of 631 Lloyds branches, soon followed by the discover of a $2.4 billion capital shortfall, according to reports. While lawmakers found that the failings were not at the hands of politicians, they did determine that internal workings of the bank failed to safeguard against such results.

KPMG and the bank are now under investigation by the Financial Reporting Council, and the FCA is similarly probing the matter.

Authorities throughout the UK are probing various matters in the banking industry, including a lack of competition in the sector and, more recently, the bundling of small business loans with bank accounts.

Full content: Reuters

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