LONDON: The former bosses of British bank HBOS should be banned by regulators from working in the financial sector ever again, according to a parliamentary commission report into the lender's collapse.
The influential Parliamentary Commission on Banking Standards attacked the state-rescued group's ex-chairman Lord Dennis Stevenson and previous chief executives Sir James Crosby and Andy Hornby in the key review.
In the report -- called 'An Accident Waiting to Happen' -- the Commission slammed the trio for a "colossal failure" of management in pursuing a high-risk strategy that caused its downfall in 2008 at the height of the global financial crisis.
The panel of lawmakers blamed the men's "toxic misjudgements" for a collapse which sparked a vast £20.5-billion ($31-billion, 24-billion-euro) taxpayer bailout at the height of the financial crisis.
In the wake of the damning report, Crosby resigned on Friday from his role as a member of the European Advisory Board at private equity firm Bridgepoint.
"The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank's board from its birth to its death," the Commission said.
"Lord Stevenson, in particular, has shown himself incapable of facing the realities of what placed the bank in jeopardy from that time until now."
The Commission concluded that regulators "should examine... whether these three individuals should be barred from undertaking any role in the financial sector."
Halifax Bank of Scotland (HBOS) was saddled with high-risk investments in the property sector and was rescued by Lloyds TSB in a 2008 takeover that was brokered by the then-Labour government.
After the ill-fated deal, Lloyds Banking Group (LBG) subsequently received a huge bailout from the state and remains 39-percent owned by the taxpayer.
In response on Friday, LBG noted the report's contents but stressed that the findings related to HBOS before its acquisition.
Lloyds added that it remained focused on its efforts for "rebuilding the group".
The Commission meanwhile slammed HBOS management's "reckless lending policies".
"Poor asset quality was the direct result of the company's strategy, which pursued asset growth in higher risk areas," it said.
"This asset growth was compounded by a risky funding strategy. The combination of higher risk assets and risky funding represents a fundamentally flawed business model and a colossal failure of senior management and of the board."
It added: "The strategy set by the board from the creation of the new group sowed the seeds of its destruction."
The Commission also noted that the old HBOS bosses had failed to admit their mistakes and called for them to apologise.
So far, ex-director Peter Cummings is the only HBOS boss to be penalised. In September, the old Financial Services Authority (FSA) watchdog fined Cummings £500,000 and banned him for life from working in the financial sector.
The Parliamentary Commission on Banking Standards was established by British finance minister George Osborne last year to examine banking standards and culture in the wake of the notorious Libor rate-rigging scandal.
The Commission also turned its fire on the FSA, which was scrapped on April 1 in a regulatory overhaul that was prompted by the global financial crisis.
"The HBOS story is one of catastrophic failures of management, governance and regulatory oversight," added Commission chairman and Conservative lawmaker Andrew Tyrie.
The FSA was replaced earlier this month with the Prudential Regulation Authority, which is part of the Bank of England and regulates lenders, and the Financial Conduct Authority.
On Friday, the FCA said would be considering the findings and conclusions of the report.
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