Why HBOS failed: review to be released

Details on why HBOS bank failed during the financial crisis will be published in a review before the end of the year, according to the Financial Conduct Authority (FCA). 

 

The regulatory body said that considerable investigation had already taken place, but that the review could now proceed in full force because disciplinary hearings related to the collapse had come to an end.

 

HBOS' failure at the height of the financial crisis in 2008 led to it being rescued by rival bank Lloyds in a takeover organised by the government.

 

The review will consider what caused the bank to collapse, and advise on what should be done to prevent similar failures occurring in the future. 

 

Enforcement proceedings against Peter Cummings, former head of corporate lending at HBOS, had been prohibiting the continuation of the review. These proceedings have now ended, with Cummings facing a fine of £500,000 and being banned from working in industry banking. 

 

Other individuals will be highlighted in the review, which will look at whether regulators "should consider afresh whether any other former members of HBOS's senior management should be subject to an investigation with a view to prohibition proceedings", according to a statement released by the FCA and the Bank of England. 

 

Anyone criticised in the review will have a right of reply prior to publication. The statement said that “the aim is to publish the final report by the end of this year".