The HBOS collapse

Any hope that British banking horror stories had come to an end with the Barclay Libor-fixing scandal was dismissed on Tuesday when Lord Stevenson, the former chairman of the collapsed bank HBOS, appeared at the Parliamentary Committee on Banking Standards. Lord Stevenson has kept a very low profile indeed since HBOS failed in 2008 and had to be rescued by the taxpayer but the Parliamentary Committee, under Andrew Tyrie's chairmanship, has insisted that he should appear before it to give an account of himself. His reluctance to do so became almost understandable as he could not satisfactorily answer question after question -- for instance, why he had put in writing to the Financial Services Authority his confidence that the bank was in a “robust” state just six months before it collapsed. The former Chancellor of the Exchequer, Lord Lawson of Blaby, put it to Lord Stevenson that he had been “either dishonest of delusional”.

After a three and-a-half hour session Mr Tyrie told Lord Stevenson that he had been “evasive, repetitive and unrealistic” and suggested that a rational analysis of HBOS's situation would have shown it was a “basket case”. A newcomer on the Parliamentary Committee was Justin Welby, soon to be Archbishop of Canterbury, who extracted from the witness that under his leadership the bank had “failed to plan for catastrophe.” Eventually, under pressure, Lord Stevenson apologised. Any more?