Banking commission urges regulators to ban three former HBOS directors
Lord Stevenson, Sir James Crosby and Andy Hornby face city ban call.
The British parliamentary commission on banking standards has urged regulators to consider ban on three former directors of HBOS from carrying out any financial business in their life time.
Interestingly, none of the three directors held prominent city jobs since leaving HBOS.
In its 96-page report, the commission accused HBOS’ former chairman, Lord Stevenson, and former chief executives Sir James Crosby and Andy Hornby, of presiding over a colossal failure.
HBOS collapsed in 2008, costing taxpayers more than £20bn after it was folded into Lloyds, which then had to be bailed out by the government. In total, the business has sucked up £28bn of capital, the report says.
The commission said the HBOS catastrophe should be seen as a case study of how not to run a bank and called on regulators to consider barring the three directors from any future role in the sector, reported the Financial Times.
The report further said that those responsible for bank failures should be held more directly accountable for their actions and face sanction accordingly.
The commission chairman Andrew Tyrie said that the report was designed to be constructive, not vindictive. He further said that HBOS was a candidate for having been the worst bank in Britain, largely because of its dreadful lending record.
Peter Cummings, former corporate banking boss of HBOS, was fined £500,000 and barred from working in the financial sector by the Financial Services Authority in 2012.
Overall directors had overseen a flawed strategy, inappropriate culture and inadequate controls, the report highlighted. “Lord Stevenson in particular has shown himself incapable of facing the realities of what placed the bank in jeopardy.”
HBOS, which collapsed in 2008 costing taxpayer more than £20bn, has sucked up £28bn of capital in total, the report said.