HBOS: the truth finally emerges

First, the senior management, the men who broke the bank. Ex chief executive Sir James Crosby and his successor Andy Hornby, together with their chairman Lord Stevenson, should consider whether it is morally right to retain their financial privileges after it was confirmed that HBOS would have been declared insolvent without a taxpayer-funded bailout.

Next, the Financial Services Authority. Guilty of “thoroughly inadequate” monitoring, this failed watchdog has also taken no steps to ensure that this triumvirate lose their “Approved Persons status” so they are barred from working in the financial services industry. Again, it highlights the inadequacies of this country’s regulatory processes – whether it be banking, energy prices or policing.

And finally, the Government. Why has it taken the passage of five years, time for Mr Hornby to head briefly the equity firm behind Boots The Chemist before becoming chief executive of top bookmaker Coral in 2011, for these failings to emerge?

As a result of a “model of self-delusion” fuelled by an absence of banking experience and a culture where key executives “congratulated themselves on their collective navigational skills” when HBOS collapsed, millions of Britons are still living with the consequences of this arrogant ineptitude on a daily basis.

Yet, while one former director, Peter Cummings, did face a £500,000 censure, it does not hide the fact that some of his former colleagues were raising concerns about an unsustainable business model three years before the crash.

Today’s report is withering with this assessment: “The weaknesses of group risk in HBOS were a matter of design, not accident. Responsibility for this lies with Sir James Crosby, who as chief executive until 2005 was responsible for that design, with Andy Hornby, who failed to address the matter, and particularly with Lord Stevenson as chairman throughout the period in question.”

It added: “This was a traditional bank failure pure and simple. It was a case of a bank pursuing traditional banking activities and pursuing them badly.”

These conclusions speak for themselves. It is now incumbent upon the named individuals, plus the Treasury and the FSA, to provide responses that recognise the scale of the criticisms – and the misery still being endured by taxpayers. And that is before separate questions pertaining to the revoking of peerages and knighthoods are even debated.