The entire financial services industry should comply with new stricter rules governing the appointment of banking executives and directors, the City watchdog said on Tuesday as it admitted it had fallen short in vetting senior staff at the Co-operative Bank, the Financial Times reported. The backing for a drastic expansion of the new “senior persons regime” which would affect tens of thousands of senior City employees came as the regulator testified over the scandal at the Co-op Bank whose disgraced former chairman, Paul Flowers, was filmed buying illegal drugs.

The U.K. government will need to find a further £25 billion ($41 billion) of budget cuts after the 2015 election to reduce its borrowing and support a sustainable economic recovery, Treasury chief George Osborne said Monday, The Wall Street Journal reported. Mr. Osborne had previously indicated his Conservative party would seek further cuts in spending if it is returned to government after the vote, but hadn't given a specific figure. The government's planned spending for the financial year ending in March amounts to £717.8 billion. Mr.

Britain's financial regulators have launched an investigation into problems at the Co-operative Bank, including the role played by former senior managers, they said on Monday, Reuters reported. The probe could lead to fines for the bank and its former directors. Co-op Bank fell under the control of investors including U.S. hedge funds after a 1.5 billion pound capital shortfall was exposed. Its problems were exacerbated when former chairman Paul Flowers was arrested as part of an investigation into the supply of illegal drugs.

Three firms that were involved in a £3.2m scam selling carbon credits to retail investors have been ordered into insolvency by the High Court, Blue 7 Green Tomorrow reported. Global Carbon Brokering supplied carbon credits to Global Neutral, which then marketed them to the public at inflated prices, according to the Insolvency Service. Another carbon credit supplier, Future Carbon, was also wound up on the grounds of public interest. All the companies were linked with World Future, a company that raised £2.5m by selling carbon credits in a misleading way.

Bankruptcy, the last resort of the desperately indebted, is now so expensive that costs in England and Wales can easily outweigh the debts that led to insolvency, the Financial Times reported. As the UK’s hangover from years of cheap credit drags on, the government has become concerned that fees charged by the companies that manage bankruptcies are too high and it is expected to make an announcement on the subject this month.

Britain's Prime Minister David Cameron promised on Sunday to protect pensioners' income if his Conservative party wins the 2015 election, laying out his first manifesto spending pledge, Reuters reported. Coming at a time when Britain is facing years of cuts to public spending, the promise is designed to win the support of the country's elderly - who polling data show are more likely to vote in elections than younger people.

The UK arm of the business operated by Irish builder Gerry Gannon – whose Irish loans are being managed by Nama – returned to profit in 2012 after securing debt write-offs and the transfer of bank loans, the Irish Times reported. Gannon Homes (UK) Ltd recorded a profit of £6.875 million (€8.3 million) after assigning the company’s bank loans and overdrafts totalling £24.9 million to third-party investors and writing off £1 million owed by the firm to Irish-based Gannon Homes Ltd.

The U.K. government is considering rule changes that would make it easier for new banks and alternative finance providers to provide funding to small and medium-sized companies, Bloomberg News reported yesterday. The proposed regulations would help new entrants to the funding market check the creditworthiness of smaller companies, the Treasury said on Dec. 24. Interested parties have been asked to submit their views during a consultation period that runs until Feb. 17, with the government aiming to submit legislation in the next session of Parliament.

Reports of suspected market manipulation soared by 43 percent this year as the U.K. financial regulator investigated the rigging of multiple benchmark rates, Bloomberg News reported yesterday. The Financial Conduct Authority (FCA) received 117 reports of suspected “distortion and manipulation” of markets in the 12 months to August, compared with 82 in 2012, according to Bovill Ltd, a financial services consultant in London.

The U.K.'s official statistics agency said Tuesday it plans to change the way it calculates data on the public finances, a move that will revalue the British government's debt upward by more than a hundred billion pounds, The Wall Street Journal reported. The overhaul will reverse an accounting maneuver by Chancellor of the Exchequer George Osborne last year that lowered the government's borrowing figures in the short term. But the new debt calculations would apply retroactively and thus would be unlikely to require a policy response. Mr.