UK watchdogs take no action against former HBOS bank managers – Reuters


General view of the Bank of England in London, Britain, October 22, 2021. REUTERS/Tom Nicholson
LONDON, Aug 26 (Reuters) – Britain's two banking regulators said on Friday they would take no enforcement action against certain former senior managers at HBOS, a bank that collapsed in 2008 during the global financial crisis.
HBOS had to be rescued via a government-engineered takeover by rival Lloyds, which subsequently needed a 20 billion pound ($23.74 billion) taxpayer bailout, prompting public anger, a rise in Britain's debt and a revamp in financial regulation.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) opened investigations into certain unnamed former senior managers at HBOS in January 2016 to determine if any of them should be banned from the financial sector.
But after six years of sifting through 2 million documents, the two regulators said on Friday that the investigations had now been concluded, with a decision by "each of the authorities' independent decision-makers to take no further action".
The investigations into officials at HBOS, which traded under the Halifax and Bank of Scotland brands, stemmed from recommendations in a report from independent lawyer Andrew Green in November 2015.
Green said the PRA and FCA should review a decision by the Financial Services Authority (FSA), a regulator tarnished by a light-touch reputation and replaced by the PRA and FCA, not to act against 10 executives.
"We will do this piece of work as soon as possible," Andrew Bailey, then BoE Deputy Governor, said in November 2015.
The FSA had taken enforcement action in 2012 against Bank of Scotland and Peter Cummings, chief executive of HBOS's corporate division.
Bailey, now Governor of the BoE, also said in 2015 that what happened to HBOS highlighted the need to resist political pressure for light-touch bank regulation.
Friday's announcement could pile more pressure on the FCA and the PRA.
Liz Truss, the frontrunner to become Britain's prime minister in September, has indicated she would review the roles of the PRA and the FCA because she believed they had not focused enough on growth. read more
Bailey warned earlier this month that weakening the independence of regulators would undermine financial market reforms currently before parliament, as well as Britain's international standing as a financial centre. read more
($1 = 0.8425 pounds)
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