HBOS Executives Face MPs Over Bank Meltdown

Two former bosses of HBOS and the ex-chairman will next week be forced to defend their roles in the run up to the bank's near collapse in 2008 after being called to appear before the commission on banking standards.

Sir James Crosby and his successor Andy Hornby will on Monday appear before the sub-panel set up to scrutinise why HBOS needed an emergency takeover by Lloyds in September 2008. Lord Stevenson, chairman of the former building society for a decade, will appear on Tuesday.

Andrew Tyrie, the Conservative MP, who chairs the committee, said: "Two of these men (Hornby and Stevenson) were on the bridge when HBOS failed, when public money was needed to rescue it and when trust in our banking system – both within the industry and amongst the public – collapsed almost completely."

"The decisions taken during this period, and before, had severe consequences for financial stability, for the economy as a whole and for every person in the country," Tyrie said.

Crosby handed the helm to his protege Hornby in July 2006, barely two years before HBOS was rescued by Lloyds and the enlarged bank was given a £20bn bailout by the taxpayer.

Hornby and Stevenson appeared before MPs after the 2008 bailout while Crosby was forced to resign from the board of the Financial Services Authority after he was alleged to have missed warnings about risks being taken by the bank.

The FSA is currently compiling a report on the collapse of HBOS after former corporate banking boss Peter Cummings was fined £500,000 and banned from the City. The MPs and Lords on the banking standards committee have been conducting public evidence sessions on the collapse of HBOS, and taken evidence from former board members in recent weeks and will finish its sessions next week.

Powered by article was written by Jill Treanor, for on Wednesday 28th November 2012 12.04 Europe/London © Guardian News and Media Limited 2010


image: © Trodel

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