LONDON (AP) — A group of British lawmakers launched a scathing attack Friday on the men who ran failed lender Halifax Bank of Scotland — blaming their “toxic” decisions for the bank’s downfall and recommending they never be allowed to work in the financial sector again.
The Parliamentary Commission on Banking Standards accused former chairman Dennis Stevenson and past chief executives James Crosby and Andy Hornby of failures in judgment and an “incompetent and reckless board strategy” that led the bank to the brink of collapse.
“In many ways, the history of HBOS provides a manual of bad banking,” the report said.
Lloyds Banking Group agreed to buy HBOS in 2008 to save it from collapse. The British government spent 20.5 billion pounds bailing out the combined bank, which is still about 40 percent owned by British taxpayers.
The only executive to be penalized for the debacle was head of corporate banking Peter Cummings, who was fined and barred from working in banking. But the commission said it was wrong to blame him alone and argued that Britain’s new financial regulator should consider barring Hornby, Crosby and Stevenson.
The committee has no power to sanction the ex-bankers, who have moved on to other corporate jobs, but the report could put pressure on authorities and employers to strip them of posts and titles.
After the report was released Friday, private equity firm Bridgepoint said Crosby was resigning from its advisory board.
The lawmakers called Crosby the “architect of the strategy that set the course for disaster” at HBOS.
Hornby is currently chief executive of bookmakers Coral, which said he “has the complete backing of the business.
Neither Crosby, Hornby nor Stevenson — now chairman of private equity fund Manocap — had any immediate comment.
The lawmakers also accused regulator the Financial Services Authority of failing to oversee the bank properly. They said the authority was “not so much the dog that did not bark, as a dog barking up the wrong tree.”
The government has since abolished the FSA and replaced it with a new body, the Prudential Regulation Authority, which began work on Monday.
Official Wire and AP