The report into the collapse of HBOS Group at the height of the financial crisis is to be published, some seven years after the bank failed, reports The Telegraph.
The Bank of England’s two regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), have announced their review will be released at noon on November 19, more than two years after it was originally due to be published.
It will be published at the same time as a report from Andrew Green QC into the regulator’s enforcement actions following the failure of HBOS.
Those actions will include the decision by the then regulator, the Financial Services Authority (FSA), to fine former HBOS director Peter Cummings £500,000 and ban him from working in the City for life.
Mr Cummings was the bank’s former head of corporate banking, and although he rejected the findings, he did not appeal the fine.
The decision against Mr Cummings marked the end of the FSA’s enforcement investigation following HBOS’s downfall, which saw no action against any other individuals.
The bank collapsed in 2008 during the financial crisis, as liquidity dried up in the wholesale markets, and was rescued by Lloyds TSB. However the scale of HBOS’s problems meant the enlarged bank itself had to be bailed out by the Government to the tune of £20bn in return for a 41 per cent equity stake.
Earlier this year, Andrew Bailey, the head of the PRA, said that the draft report ran to 500 pages, and that the review had involved some 1,425 representations from more than 35 individuals involved in the collapse.
The report will come more than two years after the Parliamentary Commission on Banking Standards’ own report into the HBOS collapse, which blamed the bank’s former chairman and chief executives for their “reckless” and “deluded” stewardship of the bank.
The Commission, whose members included Commons Treasury Select Committee chairman Andrew Tyrie and former Chancellor Lord Lawson, pointed the finger at the three men – former chairman Lord Stevenson and ex-chief executives James Crosby and Andy Hornby – who had run the bank from the points of it creation in 2001 – when Halifax merger with the Bank of Scotland – until its failure in 2008.
Following a media storm in the wake of the publication of the PCBS report, Mr Crosby – who had been knighted for services to the finance industry in the Queen’s Birthday Honours in June 2006 – asked for his knighthood to be taken away and voluntarily surrendered 30 per cent.
The delay to the PRA/FCA report is due to the process of “Maxwellisation”, whereby anyone named in the report is allowed to comment on it before its publications.
On hearing of the report’s publication, Mr Tyrie told The Telegraph: “This is not before time. After sustained pressure from Parliament, the Commission and the Treasury Select Committee, there’s now a prospect that the public will have an opportunity to have a full explanation of this catastrophic failure, with Parliamentary special advisers monitoring the work of the regulators drawing up this report to make sure that the role of regulators in all this has been fully scrutinised.”
