MPs name HBOS report review team

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Former building society chiefs Stuart Bernau and Iain Cornish have been drafted in by a committee of MPs to review the City watchdog’s forthcoming report into the failure of HBOS.

Bernau, the former boss of Chelsea Building Society, and ex-Yorkshire Building Society chief executive Cornish will be joined by Sir Nicholas Monck, a former permanent secretary at the Treasury, in scrutinising the findings of the Financial Services Authority (FSA).

Treasury committee chairman Andrew Tyrie said the FSA’s previous report into RBS “laid bare serious failures” at both the bank and the regulator, which admitted it had failed to monitor and challenge the group adequately.

He added: “Without persistent pressure from the Treasury committee, that report would never have been produced – parliament and the public would have been none the wiser.

“Unless regulators are frank about what went wrong last time there will be little chance of avoiding a repetition in the future.”

The FSA said it did not have a timescale for the publication of its report, which is expected to include a “high-level analysis” of the balance sheets at Bank of Scotland and Halifax. The two banks merged to create HBOS in 2001, but while the watchdog’s probe will not look at the “causes and consequences” of the group’s government-brokered rescue by Lloyds in 2008, it will examine the quality of HBOS’s loan book.

Peter Cummings, the former chief executive of HBOS’s corporate lending division, was fined £500,000 by the FSA in September.