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Friday, 9 March 2012

Bank of Scotland guilty of serious misconduct

The FSA has found the Bank of Scotland guilty of serious misconduct in the way it lent money to businesses between 2006 and 2008. They say the bank pursued "an aggressive growth strategy" that focused on high risk lending. That policy contributed to the bank having to be bailed out by UK taxpayer.

The bank has escaped paying a substantial fine. The FSA said imposing a fine would have meant the taxpayer effectively paying twice "for the same actions committed by the firm".

OK, same old whitewash. So who was running the FSA at the time.  Well one of the board members was Sir James Robert Crosby, Deputy Chairman of the FSA from January 2004 until he resigned on 11 February 2009. Surprising that he didn't nip it in the bud, particularly because he was also chief executive of Halifax Bank until its merger with Bank of Scotland to form HBOS, of which he was Chief Executive until July 2006, when he stepped down in favour of "his young protégé" Andy Hornby. Hornby was an HBS alumnus whizz-kid who had gone through starring roles at Asda and Blue Circle, but new next to nothing about banking before Crosby let him into the top spot at HBOS, which was a bit like letting the lunatics run the asylum.

Any chance Crosby will be stripped of his knighthood? Doubt it.

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