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Co-Op Rescue plan launched
Comments
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It occurs to me, is this a clue as to why the FSA was split? Because the PRA's remit is to look after the banks and screw their creditors?"It is also highly surprising that the PRA have approved pursuit of a scheme, by a solvent bank with a controlling shareholder of substance, which upends the established capital hierarchy in this way."
This country stinks."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Not too sure it's a "solvent bank". But if the Co-op gets away with this, it won't be the last.
I believe that the Co-Op Bank currently has more assets than liabilities and appears to have sufficient liquidity to carry on its day-to-day business, so it certainly qualifies as 'solvent' on that basis. It even has, to the tune of £1.7 billion, sufficient tier 1 capital to meet its required capital ratio.
The only problem is that the PRA has decreed that it has to account for a £1.5 billion deduction from its tier 1 capital to take account of worst case future losses that might arise. Hence the sudden need to find another £1.5 billion worth of new capital.It occurs to me, is this a clue as to why the FSA was split? Because the PRA's remit is to look after the banks and screw their creditors?....
Yes, sort of.
Protecting consumers and protecting banks are two very different things. Trying to do both at the same time was basically a stupid idea, as evidenced by the fact that the FSA devoted all its efforts to the former, and quite forgot about the latter until it was too bl00dy late.....This country stinks.
I'm not that impressed by the rescue plan either.0
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