MPs demand HBOS directors show remorse

THE FORMER directors of collapsed bank HBOS last night faced renewed calls to make a public show of remorse, following yesterday’s decision by ex-chief executive Sir James Crosby to surrender his knighthood and some of his pension.

Politicians from all major parties joined forces to call for similar action from Lord Stevenson, the former HBOS chairman, and Andy Hornby, another former chief executive.

Labour’s John Mann MP, a member of the Treasury Select Committee, said Crosby’s actions were those of “a banker who is prepared to say he got it wrong and wishes to make amends”.

Mann went on to say that other bankers should be willing to follow Crosby’s lead. He also suggested John Griffith-Jones, the chairman of the new Financial Conduct Authority regulator, should resign because he led the board of accountancy firm KPMG when it gave HBOS a clean bill of health shortly before it collapsed.

Former HBOS chief executive Hornby is now running gambling group Coral, who continue to insist he has their complete backing. But last night Lib Dem peer Lord Oakeshott demanded Hornby also give up a slice of his HBOS pension.

Meanwhile Lord Stevenson, whose peerage would be almost impossible to forcibly remove, is understood to be defending the honour on the basis that he received it long before HBOS collapsed.

Business secretary Vince Cable has already indicated that he wants to ban the former directors from holding regulated roles in financial services, even though none of them have indicated any desire to take up such a position.

An investigation by the now-defunct Financial Services Authority last year fined former HBOS director Peter Cummings £500,000 and banned him from the City for life, although it declined to penalise other directors.

Crosby’s apology also turned attention to other high-profile executives whose careers and honours have survived involvement in the banking crisis. Until yesterday Fred Goodwin, the former RBS chief executive, was the only banker to have lost a knighthood as a result of the crisis.

PROFILE: SIR JAMES CROSBY

Sir James Crosby, who yesterday declared his intention to hand back his knighthood following a damning report into his time at the helm of HBOS, was chief executive of the bank for most of its brief existence.

He was appointed chief executive of the Halifax in 1999, just two years after the former building society had decided to demutualise with an enormous float on the London Stock Exchange. Incredibly ambitious, Crosby pursued a fast-growth strategy and in 2001 masterminded the merger of the Yorkshire-headquartered mortgage specialist with the venerable Bank of Scotland, a financial institution so old that it predated the existence of the United Kingdom.

This deal would turn out to be a disastrous, although there was little immediate cause for concern as the business kept growing.

In 2004 Crosby was controversially rewarded with a position on the board of the Financial Services Authority, even though he was still running HBOS at the time. Three years later, after handing control of HBOS to Andy Hornby, he became deputy chairman of the City regulator but was eventually forced to resign in 2009.

A friend of former PM Gordon Brown, he gained his knighthood in 2006 and currently lives near Harrogate in North Yorkshire.

Share

In Other News

April 23, 2014, 2:03am
April 22, 2014, 2:25pm