You are here: Home - News -

Two former Co-op Bank bosses banned and fined by PRA

by:
  • 15/01/2016
  • 0
Two former Co-op Bank bosses banned and fined by PRA
The Co-op Bank’s former chief executive and managing director have both been banned and fined by the Prudential Regulation Authority (PRA) for failing to protect the bank from risks to its financial stability.

Ex-CEO Barry Tootell was fined £173,802 for poor operating practices which took place between 1 January 2009 and 10 May 2013. Tootell was found to be at the centre of a culture which viewed short-term financial strategies as a higher priority than the bank’s long-term capital position.

Tootell was responsible for managing the bank’s risk team during the time the Britannia Building Society was merging with the Co-op Bank. The PRA said he failed to properly structure and manage the team so it could act as an independent challenge to the Co-op’s business.

In a statement the PRA said: “Mr Tootell played a significant role in the Co-op Bank, managing its finances and capital position in a manner that was not in line with the firm’s own stated cautious risk appetite.”

Former managing director Keith Alderson received a fine of £88,890 for failings in his roles as director of corporate banking and MD of the corporate and business banking division.

Alderson was found to have failed to adequately assess the risks of the Britannia corporate loan book. Alderson did not highlight significant risks within the book preventing the Co-op Bank from taking action to protect itself.

Andrew Bailey, deputy governor, prudential regulation, Bank of England and CEO of the PRA, said: “Banks that are not well governed have the potential to pose a threat to UK financial stability. The actions of Mr Tootell and Mr Alderson posed an unacceptable threat to the safety and soundness of the Co-op Bank which is why we have decided a prohibition is appropriate in these cases.

“This action makes clear that there are serious consequences for senior individuals who fall short of the PRA’s expectations. The new Senior Managers Regime, which will be introduced in March, will further ensure that senior managers are held duly responsible for their actions.”

The PRA banned the former bosses from carrying out a significant influence function at a PRA-authorised firm on the grounds of a lack of competence and capability.

The regulator said both men did not deliberately or recklessly breach regulatory provisions and no findings of dishonesty or lack of integrity have been made about them.

There are 0 Comment(s)

You may also be interested in

Read previous post:
Rents rising twice as fast as wages

Average UK rents climbed 3.8% in 2015, twice as much as wages, according to the latest monthly Landbay Rental Index.

Close