UK regulators to investigate former HBOS managers

The Financial Conduct Authority and the Prudential Regulation Authority announced on Thursday that they will begin investigations into certain former senior managers of collapsed lender HBOS.

The regulators, who did not name the managers they would be investigating, said the probes would determine whether any prohibition order proceedings should be commenced against them.

“The FCA and PRA continue to review materials with a view to making further decisions regarding other former HBOS senior managers.”

The move follows a report by Andrew Green QC regarding the Financial Services Authority’s enforcement actions following the failure of HBOS.

Andrew Tyrie, Chairman of the Treasury Committee, said: “Overdue doesn’t capture it. It is eight years since the collapse of HBOS in 2008. It has taken a heap of pressure from Parliament to secure appropriate action from the regulators.

“This has included the Treasury Committee’s demands from 2011 that the regulators conduct a full inquiry into the collapse of HBOS - work that was only concluded in November 2015; a major investigation by the Parliamentary Commission on Banking Standards – which recommended that regulators consider whether any former members of HBOS’s senior management should be subject to investigation proceedings with a view to prohibition; and a request from Parliament’s specialist advisers.”

Back in November, a report into the collapse of HBOS by the PRA and FCA, commissioned by the Bank of England, stated that ultimate responsibility for the lender’s failure rested with the board and senior management.

“They failed to set an appropriate strategy for the firm’s business and failed to challenge a flawed business model which placed inappropriate reliance on continuous growth without due regard to risks involved,” it said.