FSA will launch inquiry into the failure of HBOS

THE Financial Services Authority intends to launch an inquiry into the collapse of HBOS once its “enforcement investigation” of the firm is complete, FSA chief Hector Sants revealed yesterday.

In a letter to Andrew Tyrie MP published yesterday, Sants reveals that as soon as the current investigation is closed, the FSA intends to start work on a report “providing an account of the developments over the years preceding the crisis which put HBOS in an unsustainable position in autumn 2008”.

The FSA is currently tackling a legal quagmire surrounding its inquiry into RBS, which provoked a public outcry last year when it concluded that no major management failings had taken place but failed to publish a report to back up the findings.

That means that the FSA will be keen to establish at the outset that any report on HBOS can be published without legal restrictions.