Treasury Select Committee Member John Mann MP says that today’s long awaited reported into the collapse of HBOS shows that we need the current banking regulators to be strong enough to hold banks accountable for their reckless borrowing and lending practices.
At the time the bank was at the height of its reckless borrowing phase its CEO, James Crosby was Deputy Chairman of the then regulator the FSA. There was simply no chance that a senior regulator would allow an investigation into their own banks reckless borrowing policies.
Halifax Bank of Scotland collapsed in 2008 and was merged with Lloyds Banking Group which subsequently was bailed out by the taxpayer, was borrowing £278 billion a year at the height of the boom.
John Mann said “This long awaited report shows a clear need for a regulator with strong, independent leadership that has the ability and willingness to stand up to a bank and question its borrowing and lending practices. James Crosby was to all intents and purposes the regulator. We can never allow ourselves to be in a position where senior bankers hold leadership positions in our regulator system. We can’t put the foxes in charge of guarding the hen house.”
Mann continued “The collapse of HBOS in 2008 showed just how reckless and clueless many of the senior bankers had become in their approach. They were focused on growth at any cost, even if the cost eventually was their firms collapse and failure.”
“We simply cannot afford to think that by simply banning a few senior bankers for life that the problem will be solved. This requires a sustained effort to make sure our regulators are free to act and put the security of the banking system ahead of a bankers individual short term gain.”