Regulators at the Bank of England are growing increasingly concerned about the future of Co-operative Bank as the beleaguered lender struggles to find a rescue buyer.
It is understood the Prudential Regulation Authority (PRA) has begun drawing up contingency plans for the troubled bank, which put itself up for sale last month amid mounting concerns about its capital position.
If Co-op Bank is not bought, it will be forced to attempt a costly restructuring that would result in bondholders owning the lender in return for its debts being wiped out. If a rescue is not forthcoming, the PRA would step in and force the bank into resolution, which would result in it being wound up.
But as Spud told us, it would be very wrong of the authorities to insist that the bank was run by people who actually knew anything about banking, wouldn’t it?