Photograph by Basher Eyre
A report from the Banking Standards Commission has stated that three former bosses of Halifax Bank of Scotland (HBOS) were largely to blame for the bank’s collapse, and financial regulators should consider banning them from future roles in the financial sector.
The Commission claims that three former bank boss, previous chief executives Sir James Crosby and Andy Hornby, and former chairman Lord Stevenson, caused the “colossal failure” of the bank, which then had to be rescued with Taxpayer funds in 2008. There has been no public response from any of the three men as yet, but Crosby was asked to resign as an advisor from investment firm Bridgepoint.
The bank is accused of “reckless lending” and taking on too aggressive risk, causing its £46 billion loss, which would have resulted in insolvency for the bank putting savers’ money at risk had it not been bailed out by Lloyds TSB and £20.5 billion of government funds. The report said:
The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank’s board from its birth to its death
The Commission also criticised the former City regulator, the Financial Services Authority (FSA) for failing to take steps “to establish whether the former leaders of HBOS are fit and proper persons to hold the approved persons status elsewhere in the UK financial sector”
Whilst the former boss of wholesale banking at HBOS, Peter Cummings, was banned from holding senior financial roles in the financial sector and fined £500,000 by the FSA last year, the three men accused in this report faced little sanctions.
