As I understand it from the 600 page report hot-off the press 10 former executives at HBOS could face bans – from Chairman Lord Denis Stevenson, to James Crosby to Andy Hornby and so on.  Paul Cummings, the then head of corporate lending, is the only executive brought to book for incompetence – banned and fined £500k. As with other people, I believe this report is a witch hunt that came 4 years too late!  Why has it taken so long? Sir Andrew Green QC, representing the BOE and the FCA suggests that Andrew Bailey and the PRA should consider proceedings against some of the HBOS executives. OK, but the whole episode is an absolute can of worms from top to bottom.  No one comes out smelling of violets. Before I start sounding off, the FCA/FSA were two very different animals than what they are today.  Too easy to blame BOE.  Gordon Brown was very keen to differentiate the two – Hence Lord Adair Turner and Hector Sants were given responsibility for bank regulation. I think they did a very average job, if I am going to be blunt.  I am very defensive towards and therefore supportive of Lord King and Sir Paul Tucker.


Gordon Brown would have played a better game in midfield for Raith Rovers than he supposedly did, when attempting to  oversee the necessary banking machinations at the time of the credit crisis. Was Sir Victor Blank bullied by the PM to pick up the tab for HBOS, which had a £5 billion rights issue in June to avoid another embarrassing bail-out? The whole bail-out cost to the taxpayer including Lloyds must have cost close to £25 billion. Were Alastair Darling and Lord Paul Myners even consulted? Being an old cynic, I have my doubts.


So let’s cast our minds back – Geriatrics like me who used to visit Halifax Building Building Society 2/3 times a year to nurture relationships with the likes of Mike Ellis and very occasionally Mike Blackburn, the then CEO, knew for certain that you could not find a more conservative institution than the Hali. Jon Foulds the chairman was out of the same mould. James Crosby, later to become Sir, was a man from the Pru, and the Halifax Life, then found himself CEO in 2001, before the merger with HBOS.  He then became overall CEO with Lord Stevenson as chairman.  He appointed Andy Hornby, a marketing man from ASDA, to the board grooming him to take over as CEO after 2006. He knew as much about banking as I knew about non-ferrous welding.  HBOS just lent money in grillions indiscriminately to all-comers, including property developers in their droves. Just a an example many would like to hear, though we never will, from a few entrepreneurs of the day, just how easy it was to have access to loans for business propositions.  Highly imaginative and street wise entrepreneurs knew exactly how to use the system to gain full value – nothing at all wrong with that. As it transpired, HBOS put together a loan book of chronic magnitude – £213 billion – without adequate credit analysis.  The rest is history.


There is a huge difference between incompetence and negligence and criminal fraud.  Surely this whole episode is all about incompetence, ambition and greed.   If 10 bankers/executives are brought to book, other dramatis personae should hang their heads in embarrassment.



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