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Co-op bank to escape FCA & Bank of England fines

Regulators are likely to let off the Co-Operative Bank from paying penalties, as a large fine could compromise the bank’s position.

This comes after a long-running investigation into its near collapse two years ago.

The bank was warned in June that it could face such penalties and the announcement is due to be made next Tuesday.

At this time, the bank stated in July they intended to begin formal settlement talks with the two regulators, expecting to be fined for the events that led to it requiring an emergency cash injection in 2013; “the FCA and PRA have indicated that their preliminary view is they are minded to make findings against the bank covering certain decisions, events and processes over the period from mid-2008 to end-2013” [1].

The regulators have the power to fine, reprimand and ban firms and individuals, although this is a rarity.

Royal Bank of Scotland was the first bank to be fined by the PRA for its IT failures in June 2012, which affected 6.5 million customers who were locked out of their accounts for days.

The Co-Operative Bank has been under scrutiny lately due to a debacle involving the Chairman of the Treasury, Paul Flowers, who has since pleaded guilty to possession of illegal substances.

After the near collapse of the bank, there have been rows over regulations in the way it is being run, to which the Government has promised an independent inquiry.

[1] The Guardian. ‘Co-op bank expected to escape FCA and Bank of England fines’. http://www.theguardian.com