The sad saga of the Co-op Bank drags on. Yesterday’s Guardian had an update on the moves by hard-nosed commercial Co-op Bank bondholders Aurelius and Silver Point Capital (both US-based) whose aim boils down to trying to wrest majority ownership of the bank away from the Co-operative Group.
My former colleague and friend Paul Gosling has been contributing some quite exceptional journalism on this affair in recent weeks in the trade magazine Co-operative News, and Paul was several week ahead of The Guardian in covering the Aurelius and Silver Point moves. Have a look at his piece here, for example.
The Co-op Bank says that it weighed up all sorts of solutions to its capital shortfall before plumping for its preferred scheme (which would see the bank – already legally a plc – become quoted, with minority ownership outside the coop movement). I have no insight into the bank’s senior management’s deliberations, but I hope that they looked into possible sources of capital from within the international cooperative banking sector, as well as looking to the commercial London and New York money markets. A much more satisfactory solution would have been for a listed Co-op Bank plc to be owned collectively by coop banks around the world, in partnership with the Co-op Group. Europe in particular has some very big coop banking beasts.
If this option was investigated and found wanting, it rather points up the urgency for the global coop movement of addressing the issues of capital.