The Co-operative Society is reportedly set to make a decision this week on whether it should press on with its tortuous negotiations with Lloyds Banking Group over the acquisition of 632 branches from the part-nationalised lender.
The Financial Services Authority (FSA) has put a road block on progress towards the deal, newspaper reports say, by insisting that the Co-op holds an additional £3bn of capital at group level. In effect, the FSA would be given supervisory powers over the whole of the mutual society, not just the banking arm; as well as banking services the Co-op offers insurance, legal services and funeral care, plus it owns a number of supermarkets, travel agents, electricals stores and pharmacies.
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