Watchdog admits fault

A CITY watchdog admitted it was too slow to probe accountant KPMG after it gave a clean bill of health to toxic bank hBOS in 2007.

KPMG failed to spot the mountain of toxic assets that almost destroyed hBOS when the financial crisis hit the following year.

But despite widespread outrage, the Financial Reporting Council – which is meant to police bean counters – took almost eight years to launch an investigation and then said there was not enough evidence to take action against KPMG.

FRC boss Stephen haddrill said: ‘We should have adopted a more proactive approach to our early enquiry in relation to hBOS rather than a heavy reliance on other regulators.’