Here’s how George Osborne, Andrew Bailey, Andrew Tyrie and others have reacted to today’s investigation into the collapse of HBOS
Today's publication of an investigation into the collapse of HBOS has pointed the finger at those responsible for running the bank, as well as the Financial Services Authority (FSA), the body in charge of regulating banks at the time of its collapse.
But what's the response been like? Here's what's been said. This article will be updated, as responses come in.
Andrew Bailey, deputy governor of the Bank of England: "A simple bank with a big problem"
The story of the failure of HBOS is important both to provide a record of an event which required a major contribution by the public purse, and because it is a story of the failure of a bank that did not undertake complicated activity or so-called racy investment banking. HBOS was at root a simple bank that nonetheless managed to create a big problem.
Chancellor George Osborne: "The fault of managers and regulators"
This report, from one of our most respected regulators, clearly shows that the collapse of HBOS was caused by those running the bank and those regulating it. It demonstrates that the system of regulation created by the last Labour government failed. In the end, this led to a £20 billion bailout of Lloyds Banking Group, funded by the taxpayer
Treasury Select Committee chairman Andrew Tyrie: "The FSA was asleep at the wheel"
The FSA was asleep at the wheel, and even the start of the crisis failed to wake them. The FSA did not appreciate the full extent of the risks facing HBOS. A small number of relatively junior staff were left to do the job at the time, a shocking reflection of the FSA’s lack of awareness.
The Treasury Committee has been instrumental in ensuring that the public finally gets the explanation it deserves about the twin failures of RBS and HBOS. It was persistent pressure from the Committee that ensured that these failures weren’t swept under the carpet. At their first try, on RBS, all the regulators could offer was a 298-word press release concluding that no further action was necessary. This was a completely inadequate assessment of the actions of a set of institutions that helped generate the UK’s biggest recession since the Second World War.
Institute of Directors corporate governance adviser Oliver Parry: "Don't let this hurt non-execs"
There is justifiable anger that, so far, only one HBOS executive has been reprimanded for his involvement in its failure. The regulators have plans for further investigations and it is in everyone’s interest for these to be completed much quicker than the seven years we have waited for this one.
But we must be careful not to confuse the roles of executive and non-executive directors. The HBOS failure makes it more clear than ever that proper independent oversight from experienced and hard-headed non-executive directors can help to prevent future crises. Making non-execs personally accountable, as the current Senior Managers Regime does, could deter the very best from taking on the role in the first instance. This would be a dangerous mistake.