Report on collapse of HBOS faces long delay

Regulatory reforms likely to be completed before causes of bank’s demise are ascertained

The Financial Services Authority's report into the failure of HBOS is unlikely to emerge until next summer at the earliest, The Independent has learnt.

The watchdog started work on the keenly anticipated report after its decision to fine Peter Cummings £500,000 and ban him from the City for life, making him the only banker to pay a penalty for the near-collapse of the mortgage bank.

But while considerable data has already been collected, the report will be compiled "from scratch", and senior regulatory sources say that means that it will not likely emerge until the summer.

The failure of HBOS, created from the merger of Halifax and Bank of Scotland, was almost as costly and controversial as the failure of Royal Bank of Scotland. It was ultimately rescued by Lloyds in a Government-sponsored deal which tore up competition rules and directly led to Lloyds having to go cap-in-hand for a £20bn bailout from the taxpayer.

Mr Cummings' corporate loans division squandered billions in making risky loans to property developers and other projects and was responsible for a large chunk of assets deemed "non-core" and earmarked for disposal on Lloyds' balance sheet.

The 57-year-old Scot was furious at being the only man to carry the can, describing the FSA's actions in targeting him as "tokenism" and "sinister".

The view that he was unfortunate to be the only person penalised has found sympathy in the City.

Since the HBoS debacle its chief executive, Andy Horby, has found two senior roles, first at the retailer Boots, where he lasted a matter of months, and more recently at the bookmaker Coral, where the decision to make shop staff clean lavatories generated controversy.

The FSA is understood to be working closely with Andrew Tyrie, chairman of the Treasury Select Committee, to agree independent reviewers for the report.

Its report into RBS was overseen by Sir David Walker, now chairman of Barclays, and Bill Knight, a solicitor, chairman of the Financial Reporting Review Panel and a director of the Financial Reporting Council.

The likely delay in publication will mean the report is published after the Government's financial regulation reforms have taken effect. These include splitting the roles of the Financial Services Authority, with the Financial Conduct Authority handling financial product sales and supervising markets while the Prudential Regulation Authority polices the soundness of banks and insurers under the auspices of the Bank of England.

The RBS report was only published following pressure from the Treasury Select Committee. On Thursday the committee criticised Lord Turner, FSA chairman, and Hector Sants, the then chief executive, for what it said was their failure to see the importance of publishing such a review.

It lambasted the failure to take disciplinary action against anyone involved in the management of RBS prior to its rescue other than Johnny Cameron, an investment banker who voluntarily accepted a ban from the City.

The MPs' report was also critical of the previous FSA chairman Callum McCarthy and chief executive John Tiner, who now works for the insurer Resolution.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
i100
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
(L-R) Amanda Peet as Tina Morris, Melanie Lynskey as Michelle Pierson, Abby Ryder Fortson as Sophie Pierson, Mark Duplass as Brett Pierson and Steve Zissis as Alex Pappas in Togetherness
TV First US networks like HBO shook up drama - now it's comedy's turn
Travel
Pool with a view: the mMarina Bay Sands in Singapore
travel From Haiti and Alaska to Namibia and Iceland
News
The will of Helen Beatrix Heelis, better known as Beatrix Potter, was among those to be archived
people
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
News
Nigel Farage: 'I don't know anybody in politics as poor as we are'
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect