Wall Street 'vulture funds' take significant Co-op Bank stake

Two Wall Street 'vulture funds' have seized control of part of Co-operative Bank's finances, the Sunday Times reports.

The paper said the move had raised fears the £1.5bn rescue plan for the lender could now be derailed. Aurelius Capital Management and Silver Point Capital have amassed a controlling stake in one set of the bank's loans - giving them a "powerful voice" in bailout negotiations. It is thought the funds could use their position to force higher losses on "thousands of small investors" who are already likely to lose out as a result of the rescue package. The report said the tier 2 bonds bought by the funds outrank the securities of smaller investors.