Bankers who ran HBOS in the run-up to its dramatic collapse are ultimately to blame for “catastrophic failures of management”, a damning report has found.
The Parliamentary Commission on Banking Standards launched a devastating attack on the bailed-out lender’s former chairman Lord Stevenson and past chief executives Sir James Crosby and Andy Hornby.
Their “toxic” misjudgments led to the bank’s downfall and £20.5 billion taxpayer bail-out at the height of the financial crisis and they should never be allowed to work in the financial sector again, according to the influential commission of MPs and peers.
Peter Cummings is the only former HBOS director to have been penalised by the Financial Services Authority (FSA), after being fined £500,000 and banned for life from working in the City last September.
But the commission said it was wrong that he should shoulder the blame alone and called on the new City regulator to consider barring Sir James, Mr Hornby and Lord Stevenson from taking up any role in the financial sector.
The commission said in the report: “The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank’s board from its birth to its death.”
Lord Stevenson in particular came under heavy fire, having infuriated the commission by claiming reckless lending at HBOS was not his fault because he was “only there part time”.
The commission found the former HBOS bosses also failed to admit their mistakes and should apologise for their “incompetent and reckless board strategy”.
Sir James, who was chief executive of HBOS from 2001 to 2006 and also former deputy chairman of the FSA, is a member of the European Advisory Board at private equity firm Bridgepoint.
Mr Hornby is chief executive of gaming group Gala Coral and Lord Stevenson has gone on to hold a number of non-executive board positions since leaving HBOS.