Former HBOS chief executives face a grilling from MPs

Sir James Crosby headed HBOS until 2005. Picture: PA
Sir James Crosby headed HBOS until 2005. Picture: PA
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Two former chief executives of HBOS and an ex-chairman will appear next week before lawmakers conducting an inquiry into the bank’s near collapse in 2008.

Sir James Crosby, chief executive between 2001 and 2005, and Andy Hornby, who was the boss of HBOS from 2006 until 2008, are set to be quizzed on Monday by the parliamentary commission on banking standards. Lord Stevenson, HBOS chairman between 2001 and 2009, will appear the following day. Andrew Tyrie, the Tory MP who chairs the commission, said yesterday that he wanted to examine why HBOS failed and what lessons can be learnt to prevent future banking failures.

He said: “Two of these men were on the bridge when HBOS failed, when public money was needed to rescue it and when trust in our banking system – both within the industry and amongst the public – collapsed almost completely.

“The decisions taken during this period, and before, had severe consequences for financial stability, for the economy as a whole and for every person in the country.

“We will want to know how and why HBOS failed and what lessons can be learnt to prevent any future failures from having such a dire impact.”

Lord Turnbull, a member of the HBOS panel which took initial evidence, said its work was almost complete: “With so little information in the public domain, and with the FSA [Financial Services Authority] report not due until after the commission has finished its work, it is proving a useful exercise.

“It is clear from what we have seen and heard that the prevailing culture and standards at HBOS might have had a role to play in its collapse.

“It is only right, therefore, that those responsible for leading HBOS should appear before the full commission.”

The commission has appointed another barrister – Rory Phillips QC – as counsel to act as a specialist adviser to the commission with a power to examine witnesses.

Alongside existing counsel David Quest, he will play a key role in the questioning of witnesses at next week’s sessions.

This is the first time the full commission has used counsel.