Risks 'went unchecked'

The Financial Services Authority (FSA) has been carrying out a full-scale review of Royal Bank of Scotland, HBOS and Bradford & Bingley since April.

Although the investigation has not found any illegal activity, communications failures left board members unaware of the risks being run by executives before the crisis struck, said a report.

At HBOS – which was saved from nationalisation by Lloyds TSB – the investigation centred on the "accuracy and completeness" of financial information presented with its own fundraising efforts in April 2008.

Bradford & Bingley, which was broken up and part-nationalised in October 2008, has faced questions over its buy-to-let loan book and its self-certification mortgages.

The FSA declined to comment.