Auditors of banks ‘failed lamentably’

Tory former chancellor Lord Lawson of Blaby last night backed a call for tougher requirements on auditors in the wake of the banking crisis.

Lord Lawson said bank auditors had “failed lamentably” in their duty to the public and shareholders ahead of the crisis, as he took part in committee stage debate on the Financial Services Bill.

He said a new requirement on auditors to report on banks’ “exposure to risk” would help to fix the situation, but stressed it was not the complete answer.

Lord Lawson reminded peers they were debating the issue “in the shadow of the worst banking crisis of our lifetimes and possibly the worst banking crisis there has ever been”.

Auditors seemed to think that they only had to “satisfy the management of the banks at the time”, when, under law, their duty was to the shareholders.

Lord Lawson said: “They have a duty to the wider public to do a good job, quite apart from their duty to the shareholders of the bank, and they failed lamentably.”