The long-awaited report into what went wrong at HBOS before it was rescued by Lloyds TSB during the 2008 banking crisis is facing further delays, it has been revealed as investigators admitted they need the permission of individuals criticised in the report before it can be published.
Andrew Bailey, deputy governor of the Bank of England, revealed on Tuesday that the draft report on events that took place at least seven years ago ran to 500 pages. The investigation has already received 1,425 representations from more than 35 individuals and their lawyers over the report, which is being compiled by the Bank of England and the Financial Conduct Authority (FCA).
In a letter to Andrew Tyrie, the MP who chairs the Treasury select committee, Bailey was unable to say when the report would be published as the investigators now had to give individuals in the report a second chance to look at its findings. The process is known as “Maxwellisation”.
“We have now … completed the first wave of maxwellisation to the extent legally required of all those criticised in the report. This process resulted in a high volume of representations (1,425) from more than 35 different individuals and their legal representatives,” Bailey said in the letter, which was also signed by Sir Brian Pomeroy, senior independent director at the FCA.
After taking into account their representations and following further scrutiny by a steering committee set up to oversee the report, further consultation was needed, they said. Even once this was completed – a process which has yet to begin – consent will then be required from the individuals involved.
“As a result, we are required to re-maxwellise anybody in relation to whom, as a result of changes made to the report, we consider the level of criticism to have increased. We intend to commence this re-maxwellisation process in the coming weeks. We will also need to consider any further representations we receive in response to this,” said Bailey and Pomeroy.
The letter was published ahead of the public meeting of the FCA on Wednesday, when the delays to the HBOS report are expected to be discussed. The public meeting is taking place at a time of heightened scrutiny of the FCA after its boss, Martin Wheatley, quit last week after learning that the chancellor, George Osborne, did not intend to renew his five-year contract.
Tyrie said the Treasury select committee would be seeking views on the repeated delays to the report. “It is now almost seven years since the collapse of HBOS. £20.5bn of taxpayers’ money was required to bail it out. The Treasury committee has been instrumental in ensuring that the public will receive the full explanation it deserves,” he said.
“We have been waiting a long time. The review should be published as soon as possible.”
The work on the report began in 2012 after the then City regulator, the Financial Services Authority, banned the former HBOS banker Peter Cummings from working in the City.
This article was written by Jill Treanor, for theguardian.com on Tuesday 21st July 2015 20.46 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010