because it would harm the bank's recovery

The Co-operative Bank has escaped a huge fine in spite of shambolic management that led to its near-collapse two years ago. The lender, which was championed by Labour as the future of banking, had to be bailed out by hedge funds after a £1.5billion black hole was discovered in its finances. Now a two-year probe by the Bank of England and the Financial Conduct Authority has concluded. The results, published today, say that the failings at the top of the bank were severe enough to warrant significant fines.

But, in an extraordinary move, the regulators said that they have decided not to levy the fines – because they would harm the bank’s recovery, such is the parlous state of its finances. They also confirmed that investigations are continuing into key figures in the crisis, including disgraced former bank chairman Paul Flowers. The Methodist minister was last year fined £525 after pleading guilty to possessing cocaine, crystal meth and ketamine. When being questioned by MPs on the bank’s finances, he was unable to recall the scale of its balance sheet....Read more here