A report by MPs into the Co-operative Bank’s failed attempt to buy 632 branches of Lloyds has slammed the company’s auditor KPMG and the financial watchdog the FSA which both should have spotted a black hole in the company’s finances which scuppered the deal.
MPs said the late discovery of the shortfall, which itself stemmed from the bank’s merger in 2009 with the Britannia building society, meant the opportunity to create a "significant new challenger" in the UK retail banking market had been "scuppered".