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HBOS report to ask why FSA only questioned one exec over collapse

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An investigation into the collapse of HBOS in 2008 will question the regulator’s decision to only investigate one executive over the affair.

The report, which is due to be published next week, will look at the reasons for the collapse of the bank after its takeover by Lloyds Banking Group at the height of the financial crisis.

However, the FT reports that a chapter authored by Andrew Green QC will specifically investigate decision making within the FSA – the predecessor of the FCA – and look at whether more of the bank’s executive team should have faced censure.

HBOS head of corporate lending Peter Cummings was the only staff member to face disciplinary action after the regulator found he led an overly aggressive expansion strategy.

Cummings was fined £500,000 in 2012, and banned from working in financial services.

A previous enquiry by the Parliamentary Commission on Banking Standards called for former HBOS chief executive Andy Hornby, chairman Lord Stevenson and HBOS board member James Crosby to also face bans from the sector.

Crosby was stripped of his knighthood in 2013 following publication of the report.

Originally expected in December, the report was delayed until after the election to allow for “Maxwellisation”, a process through which those criticised in reports are allowed to respond prior to publication.

Responding to its imminent arrival, Treasury committee chairman Andrew Tyrie says: “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 – £20.5bn of taxpayer’s money was required to bail HBOS out.”

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Should the TSC be asking or indeed telling the investigation team to go knock on John Griffith-Jones’s door, after all KPMG were the auditors which he was chairman (at the time)

    They are as culpable as any, given the string of failures to spot wrong doing or inconsistency with accounts, as well as HBOS we have CO-OP, BNY Mellon, Kaupthing Bank, Quindell, HSBC

    Evidence that on to many occasions KPMG have give a clean bill of accounts, only to hide the failures within !

  2. It was KPMG that signed off on the sacking of Paul Moore. Maybe they will read his book Crash Bank Wallop for the true story behind the collapse available from newwilberforce.co.uk.

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