LONDON — U.K. Chancellor of the Exchequer George Osborne on Friday launched a formal investigation into the troubled recent history of struggling lender Co-operative Bank, just hours after its former chairman was arrested as part of a drugs probe.
The inquiry will cover the period from 2008 to the present and will be led by an as-yet unidentified “independent person,” the U.K. treasury said in a statement. In Britain, such inquiries are usually headed by a judge.
Separately, Britain’s two financial sector regulators, the Prudential Regulation Authority and the Financial Conduct Authority, said they are considering whether to launch their own investigations into Co-op Bank, which has struggled with bad debts and become mired in scandal.
“The Co-operative Group and The Co-operative Bank will cooperate fully with any inquiry,” they said in a statement.
Paul Flowers, the bank’s former chairman, was arrested as part of a drug investigation, amid a growing stack of misconduct allegations against him from some of his former employers.
