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Report into HBOS collapse delayed until post-election

An report into the collapse of HBOS will delayed until after the general election, due to “wrangling” over the roles of senior staff in the bank’s failure.

The Times reports disputes over whether former HBOS chief executives James Crosby and Andy Hornby should be sanctioned for their part in the failure have delayed the report, until the summer at the earliest. The report, which is being compiled by barrister Andrew Green QC at the Treasury’s request, was originally due in December.

Former HBOS head of corporate banking Peter Cummings has already been fined and banned by the regulator from working in the City.

Under a rule implemented following the Robert Maxwell affair that says official inquiries must show people named in a report any sections that apply to them before publication, the FCA and Prudential Regulation Authority have had to show relevant sections to the relevant HBOS employees.

It is believed a section included by Green on “potential enforcement” is seen as being focused on people’s judgements rather than any clear chain of events, pushing the report’s publication back until after the election.

The inquiry was launched by the FSA in September 2012 after the regulator concluded its sanctions against Cummings. A December deadline was set with FCA senior independent director Sir Brian Pomeroy expressing publicly in July his “firm expectation” that the deadline would be met. However, the deadline passed with no FCA update on the report.

In October, Money Marketing revealed the regulator had set aside £1m to pay for the inquiry.



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. The reasons for HBOS demise are clear and unambiguous. Firstly they ignored the obvious risks being taken in the Treasury function claiming ‘the models are correct’. They got rid of a decent risk director and replaced him with the head of retail i.e. they put sales in charge of compliance! They ignored staff that highlighted wrong doing, including moving staff that protested against PPI misselling and making a number of key risk personnel redundant. They then went on to indulge in a selling and lending frenzy buying up books of junk loans when others were retreating from the market (see Peter Cummings enforcement notice). And don’t forget their CEO did not understand banking and has publically admitted this. There was also a lot more than this if you go through the history but these are the key points in their downfall. If the report does not do justice to these and other misdemeanours then we will know it is a cover up.

  2. As I see it the events complained about happened prior to the credit crunch in 2008 but did not come to light until after. It is now at least 7 years after. The report should have been produced much more quickly than this. Remember justice delayed is Justice denied.
    This is the second announcement about a report being delayed until after the election, the other being the Chilcot report. If it is the Maxwell rule which is causing these delays then it needs to be reviewed. I can see the merit of giving people a chance to respond before publication but surely time limits should be imposed, say 6 months in total from first notification.
    Our present system of delays and more delays could result in the statute of limitations being exceeded or the individuals being so old and infirm as to be beyond practical sanction.

  3. I hope the report also looks into the role John Griffith Jones had in all this, as chairman at KPMG ?

    After all they (KPMG) signed of the directors valuation of the loan book and was involved in the review of the credit risk in the corporate lending division which lost 25 billion

    It looks to me as this man is more concerned about taking the money (it must have been millions) and to hell with making sure his company does the right thing !

    Then on the other hand maybe, just maybe this is the kind of attribute the regulator wants ? as ultimately this all gets paid for be the consumer !

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