Andrew Bailey, chief executive of the Financial Conduct Authority, came under fire at the regulator’s annual public meeting for delays in holding HBoS top brass to account.
Several members of the public gathered at the FCA’s meeting today (18 July) accused the regulator of failing to do what the Treasury select committee requested more than a year ago and take action against bosses at the helm of HBoS in the credit crunch.
HBoS, once the UK's biggest mortgage lender, suffered a devastating collapse during the 2008 credit crunch - and taxpayers were left to foot the £20.5bn bill.
Mr Bailey pointed out at the start of 2016 the FCA and the Prudential Regulation Authority decided to start investigations into certain former Halifax Bank of Scotland senior managers.
The regulators confirmed the investigations will determine whether or not any prohibition proceedings should be commenced against them.
The move to re-start investigations into HBoS senior managers comes after a report by Andrew Green QC published in November 2015 criticised the Financial Services Authority failure to take enforcement action following the failure of HBoS.
According to Andrew Green QC, the FSA should also have investigated former HBoS chief executive Andy Hornby from early 2009.
The decision in March 2010 not to investigate Mr Hornby over his role in the demise of HBoS was deemed unreasonable by the QC.
Addressing accusations from members of the public that the watchdog was dragging their heels over this, Mr Bailey insisted the FCA had done what it promised the Treasury select committee and organised a rapid review to see if there was a case to be brought.
He claimed the FCA’s decision to combine this review with looking into what happened with HBoS’s impaired-assets division in Reading “wasn’t used to delay things.”
Earlier this year a former HBoS banker who “sold his soul” for sex and luxury trips was jailed for 11 years.
Lynden Scourfield, 54, lead director of HBoS’s impaired-assets division, agreed £245m in loans that could never be repaid in order to pay for his lavish lifestyle.
He headed a division at HBoS that dealt with small companies in financial distress and lent eye-watering sums of cash to the failing businesses as his friend
David Mills, 60, and his associates charged exorbitant fees for “consultancy services” and ran the companies into the ground.
Mr Bailey said: “Reading had to be carved out of that process because there was a criminal proceeding going on.
“It always seemed to us to make sense that we had to bring these two things together.
“We had to bring that together and Thames Valley Police are providing us with their evidence now.
“I don’t agree that we have failed in the task we were undertaken to do.
“We are now involved in an investigation. It will be completed as soon as possible.”
John Griffith-Jones, chairman of the FCA, said: “It is the will of the board to get these issues dealt with as expeditiously as possible.”