Paperback review: Hubris: How HBOS Wrecked the Best Bank in Britain, By Ray Perman
Sunday 22 September 2013
In 1995 the Financial Times called Bank of Scotland the “most boring bank in Britain”, and with good reason: for 300 years it had been characterised by a rectitude bordering on the Calvinistic. But in 2001 the bank merged with Halifax to become HBOS; seven years later, on the brink of collapse, it was taken over by Lloyds TSB.
So what happened? Ray Perman, in this admirably lucid account, says HBOS broke a simple rule: “It ran out of cash and lent to people who could not repay”, becoming exposed to the sub-prime mortgage market. Perman frames the story as one of “human weakness and pride”, with a new generation at the bank desiring greater risks and rewards than their predecessors. Unfortunately for the rest of us, they were not the only ones.
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