HBOS 'lent too aggressively' admits former chairman
Tuesday 04 December 2012
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".
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 London council removes 'unacceptable' Stamford Hill posters telling women which side of the road to walk down
- 4 The response to my Pizza Express review has been overwhelming, and taught me a lot about journalism
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
London council removes 'unacceptable' Stamford Hill posters telling women which side of the road to walk down
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish referendum: Police struggle to control Unionist rally in Glasgow's George Square
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...