HBOS 'lent too aggressively' admits former chairman

The former HBOS chairman Lord Stevenson has admitted the bank lent too aggressively under his watch, leading to its near-collapse in 2008.

Lord Stevenson said the company, which is now part of Lloyds Banking Group, was left over-exposed to the wholesale lending markets when they dried up during the financial crisis.

However, he rejected claims that his board had encouraged "high-risk, reckless lending".

"We failed, along with the rest of the world, to anticipate the protracted closure of wholesale markets," Lord Stevenson told a Parliamentary hearing in London yesterday.

"The worries we had were long-term worries. Had we thought for a moment there would be protracted closure of wholesale markets, we would have been forced to take action," he said.

HBOS merged with Lloyds Banking Group in 2009. The enlarged bank was eventually part-nationalised as the full extent of its toxic debts became clear.

Lord Stevenson said that he was "extremely sorry" for the costs incurred by taxpayers, staff and shareholders.

He appeared to anger members of the Parliamentary Commission on Banking Standards by focusing on the funding markets and not internal controls at the bank.

"What brought the bank down was the closure of the wholesale markets. The day after Lehman that was it," he said.

In response, Andrew Tyrie, the commission's chairman, described his evidence as "evasive, repetitive and unrealistic".

Lord Lawson, the former chancellor and a member of the commission, said: "You're living in cloud cuckoo land aren't you?"

His appearance came a day after Sir James Crosby – HBOS's former chief executive – said lending by bankers at the company had been "incompetent".

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Arts and Entertainment
Anna Smaill’s debut novel, The Chimes, is a fusion of fantasy and romance
booksMan Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Sport
Ji So-Yun scores the only goal of the game
sport
Arts and Entertainment
One of the Pyongyang posters, the slogan of which reads: ‘Let the exploits of the northern railway conductors shine!’
art
Life and Style
Linguine with mussels and fresh tomatoes
food + drink
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen
RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head

RuPaul interview

The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
Secrets of comedy couples: What's it like when both you and your partner are stand-ups?

Secrets of comedy couples

What's it like when both you and your partner are stand-ups?
Satya Nadella: As Windows 10 is launched can he return Microsoft to its former glory?

Satya Nadella: The man to clean up for Windows?

While Microsoft's founders spend their billions, the once-invincible tech company's new boss is trying to save it
The best swimwear for men: From trunks to shorts, make a splash this summer

The best swimwear for men

From trunks to shorts, make a splash this summer