Three bankers who brought down HBOS
The three executives who ran HBOS bank in the runup to its near-catastrophic collapse will be slated on Friday for their "colossal failure" of management in a scathing report which calls for them to be held to account by the City regulator.
The highly critical account of the events that led to HBOS being rescued by Lloyds in September 2008 said the responsibility for the management failings rested with the former chairman Lord Stevenson, and the former chief executives Sir James Crosby and Andy Hornby, and says the bank would have gone bust even if the global financial meltdown of that year had not happened. The bank, formed out of Bank of Scotland and Halifax in 2001, racked up £47bn of losses on bad loans.
In a report entitled An Accident Waiting to Happen, the parliamentary commission on banking standards calls on the trio to apologise for their "toxic" mistakes which caused the downfall of the bank and prompted a £20bn taxpayer bailout.
The HBOS report comes in another torrid week for the banking industry after a report commissioned by Barclays found its bankers "seemed to lose a sense of proportion and humility" in their race for big bonuses. The regulation of HBOS by the Financial Services Authority – which was shut down last weekend – is described as "thoroughly inadequate", but the responsibility for the management failures is placed squarely on the three men.
http://www.guardian.co.uk/business/2013/apr/04/bankers-brought-down-hbos
From memory Halifax were the first to go into non status mortgages bigtime. Mortgage brokers were working out applications back to front by letting the mortgage amount generate what income level was necessary for that amount.
