Chancellor George Osborne is to order an independent inquiry into how Paul Flowers was deemed a suitable chairman of the Co-op Bank.
The inquiry is also expected to examine whether the bank’s recent leadership crisis has had any financial impact on its customers.
Its exact terms of reference and the name of its chair are likely to be formally announced in coming days.
Mr Flowers, 63, apologised after he was filmed allegedly buying drugs.
The Methodist Church said Mr Flowers had been “suspended indefinitely” from his post as a minister.
He had stepped down as chairman of Co-op Bank and as deputy chairman of Co-op Group in June.
It has also emerged that he was found to have had “inappropriate” adult images on his computer in 2011 while he was a Labour councillor in Bradford and before he was appointed chair of governors at a primary school in Bradford.
A council spokeswoman noted that the material was not illegal, but Glen Miller, leader of the Conservative group at Bradford Council, said: “Apparently no-one thought it sensible to inform the local school of the material that was found on his computer.”
The inquiry into the Co-op is to be ordered by the chancellor and arranged by the Prudential Regulation Authority, under powers Mr Osborne obtained in the 2012 Financial Services Act, the BBC’s Robert Peston has reported.
“This would be a long and detailed investigation by an independent expert into events at the Co-op Bank,” he said.
Source-BBC
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