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Tyrie warns regulators over HBOS collapse report

Treasury select committee chair Andrew Tyrie says there is a risk the Bank of England and the FCA could unfairly influence what is supposed to be an independent investigation into the collapse of HBOS.

Independent barrister Andrew Green QC has been charged with reviewing the enforcement decisions of the FSA relating to the bank’s collapse, and why the regulator only decided to go after one banker – ex HBOS corporate head Peter Cummings.

Yesterday the FCA published the terms of the review, which said that the Bank of England and the FCA will be able to see an early version of Green’s report.

The Financial Times reports that Tyrie has written to Prudential Regulation Authority chief executive Andrew Bailey, saying: “There remains a risk of a perception that regulators, by having the right to see an early draft of the entire report, are given special treatment or the opportunity to influence its contents.

“Such a perception could prejudice the value of the independent enforcement review.”

In a joint statement to the newspaper, the Bank of England and the FCA say: “We have no intention of influencing the findings of the report, and this is clear in the protocol that we have published.

“We have put stringent safeguards in place to protect the independence of the HBOS report and we believe these safeguards are more than adequate to prevent any improper influence over the report and any of its findings.”

The report into the failure of HBOS is expected by the end of the year.

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Comments

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

  1. And who is the FCA Chairman ? yep KPMG’s head at the time Griffiths Jones who gave them a clean bill of health !!

  2. It’s hard not to be deeply sceptical of a so called independent report such as this one, unless it specifically and unflinchingly names those individuals within the corridors of regulatory power whose dereliction of duty (or perhaps just plain incompetence) allowed this train wreck to happen. And then specifies the sanctions to which they should be subject. In all probability a few high profile heads should roll but I simply don’t see it happening. It would rock the establishment too severely.

    In March 2011 Tyrie repeatedly asked Sants to name names, in response to which Sants repeatedly stonewalled, claiming merely that the FSA’s failures to do its job properly were “collective”, whilst Sheila Nicoll sat beside him smirking contemptuously at the futility of the whole charade. There was absolutely nothing Tyrie could do about it. He looked like an impotent fool, all very grave and concerned but, when all else had been said and done, completely powerless. The TSC’s only power is to ask questions and put forward its views as to what it thinks the regulator ought to do, but it has none if the answers it receives aren’t satisfactory or if the regulator just says NO. That’s exactly what happened when Tyrie put to Wheatley its view that there’s a strong moral argument for intermediaries to be reimbursed the £118m we were overcharged by the FSA. Wheatley basically told Tyrie to get stuffed.

    My take on it is that, as far as regulating the banks was concerned, the FSA was given a task that was completely beyond its resources and capabilities. Sants either didn’t have the backbone to stand up and tell his masters straight that what the FCA was being asked to do was beyond its abilities or he was told in no uncertain terms that there simply wasn’t any Plan B and that he’d just have to get on with the job as best he could regardless. The outcome was almost a foregone conclusion and Sants got his knighthood anyway.

    Clive Adamson, the FCA’s resident loose cannon on deck, has made not one but two major gaffes for which, in any private sector organisation, he’d have been out on his ear. Yet he’s still there. So what will change? Little, I predict, if anything. It’ll be just another whitewash with the regulator claiming that lessons have been learned and that it’ll try to do better in the future. Isn’t that always that way it goes?

  3. “That was a previous regulator”

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