Sir James Crosby, a former chief executive of Halifax Bank of Scotland (HBOS), has quit his role as a member of the advisory board at European buyout firm Bridgepoint.
His resignation comes after the UK’s Parliamentary Commission on Banking Standards criticised his role in the failure of the bank, and recommended that the UK regulator consider whether Crosby should be banned from working in the financial services industry.
In a damning report published today, the commission concluded that “the losses incurred by the bank's corporate, international and treasury divisions would have led to insolvency, regardless of funding and liquidity problems, had HBOS not been bailed out by both Lloyds and the taxpayer … 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 … Primary responsibility for these failures should lie with the former chairman of HBOS, Lord Stevenson, and its former chief executives, Sir James Crosby and Andy Hornby.”
It added that it “expects the Financial Services Authority (recently changed to the Financial Conduct Authority) to consider whether Lord Stevenson, Sir James Crosby and Andy Hornby should be prohibited from holding a position at any regulated entity in the financial sector”.
We cannot ban an individual from working in the financial service industry unless a proper due process has been followed
In September 2008, struggling HBOS was taken over by Lloyds TSB, in a deal brokered by the UK government. A month later, as the extent of the problem became more apparent, the government was forced to spend £37 billion on the bailout of Lloyds, HBOS and Royal Bank of Scotland.
A Bridgepoint spokesperson confirmed Crosby’s resignation. “Following discussions with Sir James, he has resigned from the advisory board this morning”, a Bridgepoint spokesperson said, but declined to comment further.
“We cannot ban an individual from working in the financial service industry unless a proper due process has been followed,” a FCA spokesperson said. The FCA declined to comment on whether it will launch such a process. “The FCA will be considering the findings and conclusions of the Parliamentary Commission on Banking Standards’ report into the failure of HBOS. The FCA will be publishing its report on the failure, that was started under the FSA, at a later date,” the spokesperson said.
Crosby joined Bridgepoint’s advisory board in September 2006, after stepping down as chief executive of HBOS in July of that year.
“The advisory committee’s general remit is to provide an external perspective on the business and individual sectors,” a spokesperson for Bridgepoint told PEI at the time. “The committee meets formally four times a year with some individual meetings depending on individual transactions. It provides an external perspective on business matters that affect us and the companies we own,” he said.