FORMER HBOS chairman Lord Stevenson was yesterday accused of “living in cloud cuckoo land” by a panel of MPs and peers for defending the position of the bank before it collapsed.
Stevenson acknowledged the bank’s failure was “catastrophic” and admitted the firm had taken too many risks before the crash, particularly in corporate lending.
Members of the parliamentary commission on banking standards accused the former chairman of pushing growth too hard, in a heated hearing.
“You are living in cloud cuckoo land,” said Lord Lawson, citing a letter from Stevenson to the FSA in 2008 where he claimed the bank was stable.
But Stevenson disagreed he had pushed the bank to take too many risks. In his written evidence, he also noted the bank had been pressured by outsiders to expand the risky corporate lending division even more quickly, and argued that nobody, banker or regulator, saw the credit crunch coming.