City regulators the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have opened a probe into management at HBOS, the collapsed bank that needed a £20 billion ($30 billion) bailout in the financial crisis.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have decided to start investigations into certain former HBOS senior managers.
The investigation follows a report from lawyer Andrew Green released in November that urged regulators to reopen a probe to punish former executives of HBOS for decisions taken leading up to the bank’s collapse.
In the years following the bailout of HBOS in 2009, the now-defunct Financial Services Authority decided not to pursue sanctions against Andy Hornby and James Crosby, the former HBOS chief executives. That’s despite a parliamentary report concluding the bank’s problems were a result of “colossal failures of management.”
HBOS, which owned the Halifax and Bank of Scotland brands, suffered heavy losses in the 2008 financial crisis and neared collapse as its funding was cut off by the credit crunch.
It had to be rescued by a combination of a public bailout and a merger with Lloyds TSB, costing the taxpayer around £20 billion ($30 billion) in the early part of 2009.
So far, only one person — former HBOS wholesale banking chief Peter Cummings — has been fined and banned from working in the City by regulators investigating the collapse.
Regulators at the FSA only pursued him because they thought they had a good chance of a successful case, Green said in his report, which was a mistake.
Business Insider Emails & Alerts
Site highlights each day to your inbox.