The Co-operative Bank: Another bank black hole

Another one of our banks is in big trouble. But this time things are very different. It is tiny in comparison to giants like RBS who needed billions to stay afloat but The Co-op has been found with shortfall of £1.5billion.

The deal just revealed by the bank and the new authority, the PRA, is different though. Neither customers nor taxpayers will pay up. Instead some investors who lent the bank cash, bond holders, will have their money swapped for shares which probably won't be worth very much.

It is pretty tough if you are one of them, many may be pensioners, but this is an important illustration of how problems are meant to be all solved under the new bank rules, created since the crisis-investors shelling out for a 'bail in' rather than taxpayers paying for a bail out.

The separate question of how Co-op got in to such a mess is less straightforward.