Treasury Committee secures changes to Co-op Bank review

16 August 2018

Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, has written to the Prudential Regulation Authority (PRA) and John Glen MP, the Economic Secretary to the Treasury, requesting changes to the Protocol for the independent review into the Co-op Bank. Those changes have now been made.

Independent review into the events surrounding the financial collapse of Co-op Bank

In November 2013, Rt Hon. George Osborne MP, then Chancellor of the Exchequer, announced an independent review into the events surrounding the financial collapse of Co-op Bank.

On 19 February 2018, Mrs Morgan wrote to the Financial Conduct Authority (FCA) to ask why – over four years later – the inquiry was yet to begin. Two weeks later, the Treasury announced that it had directed the PRA to conduct an inquiry into the Co-op Bank, to be run by Mark Zelmer.

On 12 June 2018, the PRA published the review Protocol, which set out ‘the procedures under which the investigation is to be carried out and underlining the independent nature of the review’.

The Protocol stated that the Treasury ‘may choose to withhold documents from the Reviewer on the grounds of legal privilege’. This ran against Mr Glen’s commitment to provide the Reviewer with ‘full access to all relevant documents and correspondence’.

Mrs Morgan has written to Mr Glen to ask him to reconsider this position. In his response, Mr Glen confirmed that ‘no legally privileged information has been withheld from the independent reviewer’, and that the Protocol will be amended to reflect this commitment.

In a separate letter, Mrs Morgan asked Dr Norval Bryson, Senior Responsible Officer at the PRA, to reconsider the section of the Protocol which states that the Reviewer’s interview transcripts with current and former employers of the PRA, the Treasury and the Financial Services Authority will be provided to the PRA.

Such a practice would risk inhibiting what interviewees are prepared to tell the Reviewer, and in his response, Dr Bryson has agreed that transcripts will not be shared with the PRA, and that the Protocol will be amended accordingly.

Mrs Morgan’s letter to Dr Bryson also raised concerns that no information had been provided by the PRA as to how interested parties could contact the reviewer. Details have now been placed on the Bank of England’s website.

Full transparency expected

Commenting on the correspondence, Mrs Morgan said:

“The Treasury Committee expects full transparency on the findings of the review into the Co-op Bank. This would not have been possible if the Treasury chose to withhold certain documents from the review, or if the Reviewer’s interview transcripts were shared with the PRA, so the changes to the Protocol are welcome.”

“The Committee looks forward to seeing the findings of the review, which will no doubt yield important lessons for the financial regulators.”

Further information

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