​HBOS report - statement from Ashurst on behalf of eight former non-executive directors of HBOS

The former non-executive directors of HBOS for whom Ashurst act disagree with a number of the conclusions of this report, particularly the way in which it downplays the unforeseen and unforeseeable effect of the financial crisis on HBOS. Indeed the report acknowledges that its judgements have been reached with the benefit of hindsight. The report does not contain evidence that would justify any further enforcement action against executives.

Equally, they understand the justified anger about what happened. The former Chairman and CEO resigned, apologised, waived contractual entitlements and lost their investments in HBOS. Their only wish now is that current and future bank boards learn to avoid the mistakes that they and others undoubtedly made.

Notes to Editors:

1. Ashurst's clients are: Sir Ron Garrick, Anthony Hobson, Lord Stevenson, Sir Charles Dunstone, Coline McConville, John Mack, Kate Nealon & Sir Brian Ivory.
2. Ben Bernanke, the former Chairman of the Federal Reserve, has said: "September and October of 2008 was the worst financial crisis in global history, including the Great Depression … out of … 13 of the most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two and … globally, somewhere in the order of 15 to 18 major firms were bailed out, rescued, saved by their governments in Europe and in the UK."
3. Alan Blinder, Princeton Economics Professor and former Deputy Chairman of the US Federal Reserve said: "Nobody thought this might happen. Things can go wrong. But the number of things that have gone wrong, and the ferocity with which they have gone wrong I think was beyond the imagination of almost everyone."
4. 33 out of 34 economists surveyed in March 2008 forecast the UK economy to grow in 2009. The Treasury estimated growth of 4%. Actual growth was -5.9%. (Source: OBR). The Report condemns HBOS for adopting what was the consensus view in 2008.
5. In May 2008, an FSA Arrow Review praised HBOS' governance, reducing risk assessment on Management, Governance and Culture.
6. The report places little weight on the true causes of HBOS's failure, namely: inadequate capital and liquidity ratios which were universal to the sector (and set by the FSA) and HBOS's well-known wholesale funding model.
7. The Parliamentary Commission on Banking Standards wrote its own report on HBOS in 2013. Yet members of that commission sit on the Treasury Select Committee (TSC) with oversight of this report.
8. A Freedom of Information Act request for communications between the TSC and the regulators has been refused on grounds of parliamentary privilege.