Lawmakers urge executive bans for "colossal" HBOS failure
By Matt Scuffham
LONDON (Reuters) - Bailed-out British lender HBOS was so badly run it would have failed even without the 2008 financial crisis and the regulator should consider banning its former bosses from the industry, UK lawmakers said in a damning report.
The Parliamentary Commission on Banking Standards, tasked with finding ways to reform UK banks, said on Friday that HBOS was an "accident waiting to happen", with bad lending and losses across the business likely to have led to its insolvency even without the funding and liquidity problems of the financial crisis.
The committee said regulators bore some of the blame, but primary responsibility lay with Dennis Stevenson, chairman from the formation of HBOS in 2001 until its collapse, and former chief executives James Crosby and Andy Hornby.
There was a "colossal failure of senior management and the board", said Commission chairman Andrew Tyrie, a Conservative lawmaker who expressed surprise that only Peter Cummings, who was head of corporate lending at HBOS, had so far been punished.
"The Commission has asked the regulator to consider whether these individuals should be barred from undertaking any future role in the sector," Tyrie said in the report.
Following the report, Crosby resigned as an advisor to private equity firm Bridgepoint. He is also senior independent director at the world's biggest catering company, Compass (CPG.L: Quote), which declined to comment on his position.
Cummings was fined 500,000 pounds ($759,000) by Britain's financial services regulator in September and banned for life from the industry.
HBOS, Britain's biggest mortgage lender, had to be rescued with a government-engineered takeover by rival Lloyds (LLOY.L: Quote), which subsequently needed a 20-billion-pound bailout to survive. Continued...