Findings to be published next week
HBOS report will ask why executives were not quizzed
A long-awaited report on the collapse of HBOS will be published next week and will ask why the regulator did not instigate a full investigation into those running the bank at the time.
Sources say it will point out that the now-disbanded Financial Services Authority only pursued enforcement action against one executive, Peter Cummings, who ran the corporate loan book. He was eventually banned and fined £500,000.
Other executives, including Andy Hornby, the chief executive, were left to take up other lucrative positions in the City.
The report to have been published two years ago. A decision to hold back publication until after this year’s election only added to suspicions about its contents and the motives behind those ordering its delay.
HBOS, formed by the merger of Halifax Bank and Bank of Scotland, came within hours of collapse in 2008 unless it received an emergency loan from the government. It was acquired by Lloyds Banking Group in a shotgun merger brokered by the then Chancellor Alistair Darling who bailed it out with £20.5 billion of taxpayers money.
MP Andrew Tyrie, chairman of the Treasury Committee, yesterday said the public deserved to know exactly what happened.
“This is not before time – it is seven years since HBOS collapsed. The production of this report results from persistent pressure from the Treasury Select Committee and the Parliamentary Commission on Banking Standards to find out what really happened.
“There is now a reasonable prospect that the public will at least have an opportunity for a full explanation of this catastrophic failure. They deserve it – £20.5 billion of taxpayer’s money was required to bail HBOS out.”
According to one source, the report will claim the FSA was under-resourced at the time of its investigation into HBOS.
The FSA was eventually wound up and replaced by a new regulatory system.
The Treasury has been selling its shares in the bank and expects to have recovered all the taxpayer’s stake by next year.