The Co-op: 'City roadkill'
The Co-op disaster has gone from bad to worse.
The Co-op disaster has gone from bad to worse. It emerged last weekend that the former chairman of the Co-op bank, the Reverend Paul Flowers, had been filmed allegedly buying hard drugs. This week group chairman Len Wardle stood down. The stricken mutual is trying to raise £1.5bn to plug a hole in its balance sheet. City minister Lord Myners has said that the scandal could threaten the recapitalisation plan.
What the commentators said
But the regulator is equally to blame for the fact that he was in charge, as Nils Pratley pointed out in The Guardian. Northern Rock and Royal Bank of Scotland were two clear warnings of "the perils of allowing non-bankers to be chairmen of banks". What's more, said The Guardian, MPs should remember that "politicians cheered from the sidelines" as the Co-op attempted the takeover of 632 Lloyds branches, or trebled its high-street presence in 2009 by snapping up the Britannia building society.
They were trying to promote the bank as the answer to "the City fat cats that the taxpayers had to bail out". Now, not least because of all the bad debts in Britannia's books, the Co-op is "City roadkill", concluded The Guardian. The upshot, as Philip Augar noted in the FT, is that the mutual model in itself cannot save organisations from "the usual culprits in banking: bad management, nave governance and sloppy regulation".
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Michelin Key Hotels 2025: the top destinations in the world
The Michelin Keys have been awarded to spectacular hotels across the world. From Marlon Brando's private resort in Polynesia to a Bvlgari hotel in Tokyo, we look at some of the most extraordinary stays in 2025
-
MoneyWeek news quiz: How much could you get in car finance compensation?
The car finance scandal, inheritance tax, and house prices all made headlines over the past few days. Test your knowledge while reviewing this week’s top stories with MoneyWeek’s news quiz