View more on these topics

HBOS chair told FSA it was ‘safe harbour’ 6 months before near-collapse

Lord Stevenson

Former HBOS chairman Lord Dennis Stevenson told the FSA it was a “safe harbour” in March 2008, just six months before it nearly collapsed.

In a letter to FSA chairman Sir Callum McCarthy in March 2008, published today by the Parliamentary Commission on Banking Standards, Stevenson said HBOS was “robust” and will be “boringly boring” for the next year or two.

In October 2008, Lloyds bought HBOS before the merged firm, Lloyds Banking Group was bailed out by the Government to the tune of £21bn.

In his letter Stevenson told the FSA HBOS was a “highly conservative” institution with “high quality” assets, and claimed the bank had no problem financing itself, even on the “hairiest of days and weeks”.

He wrote: “My soberly considered view is that given the extraordinary external environment, HBOS in an admittedly uncertain and worrying world is in as secure a position as it could be. Happy to be cross questioned on this but I hope you know me well enough to know this neither bravura nor an ill considered statement.

“The new 24/7 problem of rumour feeding upon rumour and creating a wholly irrational ‘hit’ or ‘run’ on an institution – probably but not necessarily generated with criminal intent – that create self fulfilling prophecies that are difficult to stem. That is my number one worry.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. So he was either lying or incompetent.

    And the FSA accepted his word?

    There is a cosy relationship at the top of our society that needs to be dealt with or these scandals will continue.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com