Regulators to investigate HBOS managers

Regulators are to begin investigations into senior managers at HBOS, the bank which collapsed during the financial crisis.

Two reports, published in November, criticised the regulator at the time for failing to take action.

One of those reports, by barrister Andrew Green QC, said regulators should consider banning 10 former HBOS executives.

A new investigation has now been announced by regulators.

"The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have decided to start investigations into certain former HBOS senior managers," the regulators said.

"These investigations will determine whether or not any prohibition proceedings should be commenced against them. The FCA and PRA continue to review materials with a view to making further decisions regarding other former HBOS senior managers."

No details are being given as to the exact nature of the investigations, who is being investigated, or the timeframe of the inquiry.

Criticism

A Bank of England/FCA report examined the failure of HBOS, while Mr Green examined decisions taken by the Financial Services Authority, the City regulator at the time of the HBOS demise. Both were published in November.

So far the only person to have been banned is Peter Cummings, who was previously the head of corporate lending at HBOS. In 2012, he was fined £500,000, and banned from senior positions in banking.

In his report, Mr Green suggested that the Bank of England's PRA and the FCA should consider prohibition proceedings against former executives.

That included Andy Hornby, HBOS chief executive from 2006 to 2009. Mr Green said the FSA was "misguided" when it took the decision not to take action against Mr Hornby.

Other former HBOS executives named in the report included Lord Stevenson, and Mike Ellis, the former group finance director at HBOS.

Lindsay Mackay, the head of HBOS's Treasury division from 2004, could also be banned, November's report said.

James Crosby, HBOS chief executive from 2001 to 2006, has retired. He gave up his knighthood in 2009, and surrendered part of his pension.

Eight former non-executive directors of HBOS were criticised in the report, although they said they disagreed with its findings.

The eight, including Lord Stevenson and Carphone Warehouse founder Sir Charles Dunstone, said the report had downplayed the "unforeseeable" effects of the financial crisis.