THE BANK Of England will study what went wrong at the Co-op Bank and whether the regulators could have done more about it sooner, it emerged this weekend.
The Prudential Regulation Authority (PRA) found a £1.5bn capital hole at the bank earlier this year, leading to a change of management at the bank, as well as an agreement with creditors that will see the Co-operative Group lose its majority ownership of the bank which bears its name.
It is understood that the PRA launches a post-mortem every time an incident like this occurs, studying data and emails from the past years to see whether it could have identified the problem earlier.
However it will stop short of a fully blown investigation such as the study into HBOS and RBS, which took place because that bank collapsed and because parliament wanted the investigation.
Nonetheless the study may help parliament assess the damage – the Treasury Select Committee is looking at the Co-op’s failure to buy hundreds of branches it tried to acquire from Lloyds, and may ask for more information from the PRA.
The PRA declined to comment.