So, when WILL we learn truth about bank chiefs?

ANOTHER YEAR AND STILL NO SIGN OF KEY HBOS PROBE

FIVE years after the City watchdog launched a probe into banking bosses following the near-collapse of HBOS, its promised report is still nowhere to be seen.

The new boss of the Financial Conduct Authority (FCA), Nikhil Rathi, is under pressure to publish the long-awaited review into the failure of HBOS, which went under more than a decade ago.

The FCA announced at the start of 2016 that it was launching investigations into ‘certain former HBOS senior managers’, to find out who was responsible for what went wrong and decide whether they should be barred from working in a similar role again.

But since then, there has been no update from the FCA and no hint as to what it has uncovered.

Tory MP Peter Gibson, chair of the All-Party Parliamentary Group on Personal Banking and Fairer Financial Services, said that there was a ‘culture of delay’ at the FCA and that there was ‘no doubt it is failing’.

He added: ‘The question to be debated now is not whether the regulator is unfit for purpose but rather, “What’s it going to take to get the FCA fit for purpose?”’

Labour’s Shadow Chancellor Anneliese Dodds said: ‘Taxpayers and affected consumers deserve answers.

‘The Government still needs to learn lessons from HBOS. We need to see a long-term plan ensuring regulators have the powers and resources they need to prevent a similar collapse.’

HBOS, formed through the 2001 merger of Halifax and Bank of Scotland, nearly collapsed in 2008 during the financial crisis. Ambitious expansion left it weak, and it was rescued by rival Lloyds and a £20bn bailout from the Government.

Around 2m retail shareholders suffered heavy losses after HBOS’s downward spiral and takeover by Lloyds. When Halifax converted from a building society to a bank and listed on the stock market, its shares were 700p each, and they climbed during the early 2000s. By the time of the Lloyds deal, they were worth less than 90p. The takeover valued them at 232p.

Andy Hornby, who took over as chief executive of HBOS in 2006, has already been criticised in a report by the Parliamentary Commission on Banking Standards which found that he was ‘unable or unwilling to change course’ at HBOS after his predecessor James Crosby set the bank on the road to ‘disaster’.

And an initial, broader report by the FCA and the Bank of England’s Prudential Regulation Authority (PRA) in 2015 concluded the board and senior management ‘failed to challenge a flawed business model’. Crosby, who had been honoured for services to the financial industry in 2006, handed back his knighthood in 2013.

Andrew Bailey, who was chief executive of the PRA at that time, admitted it was important to get to the bottom of the HBOS disaster because it was ‘ an event which required a major contribution by the public purse, and because it is a story of the failure of a bank that did not undertake complicated activity or so- called racy investment banking’.

But despite then becoming the chief executive of the FCA for the next four years, Bailey was still not able to complete the HBOS review before he was appointed Governor of the Bank of England this year.

The FCA has declined to reveal which particular HBOS employees it is investigating or on the ongoing HBOS probe.

‘The regulator is unfit for purpose’

Under scrutiny: Former HBOS chief executive Andy Hornby