BoE and FCA to publish report into HBOS collapse

The FCA had previously said that it was not appropriate to launch a wider review until the conclusion of certain enforcement proceedings, which concluded in September 2012.

As part of a legal procedure known as ‘Maxwellisation’, the FCA is required to give anyone criticised in its findings a copy of the evidence before it is published and an opportunity to make representations in response.

As the report draws heavily on confidential information, their consent is also legally required before publication of information. As a result, many former executives have challenged the report and delayed its release.

HBOS collapsed in September 2008, and was bailed out with over £20billion of taxpayers’ money.

The FCA said that the report would summarise why HBOS failed, inform a wider internal and public understanding of the causes of failure during the crisis, and assess management, governance and culture at HBOS at the time.

Crucially, the report will also assess the reasonableness of the FSA’s enforcement investigations in relation to the failure of HBOS, and offer an opinion as to whether the regulators should consider afresh whether any other former members of HBOS’s senior management should be subject to an investigation with a view to prohibition proceedings.

Andrew Tyrie MP, Chairman of the Treasury Committee, said:

“There is now a reasonable prospect that the public will at least have an opportunity for a full explanation of this catastrophic failure. They deserve it - £20.5 billion of taxpayer’s money was required to bail HBOS out.

“For the first time, Parliament – the Treasury Committee – has appointed its own specialist advisers and placed them inside the regulators, to monitor the preparatory work on this report. The work of the advisers can give Parliament and the public more confidence that the role of the FSA, in the failure of HBOS, will have been fully disclosed.”