Hubris: How HBOS Wrecked the Best Bank in Britain
Page 32
1 Darling, Back from the Brink, location 1876
2http://news.bbc.co.uk/1/hi/8375969.stm
3 http://www.bloomberg.com/data-visualization/federal-reserve-emergencylending/#/HBOS_PLC/?total=true&mcp=true&mc=true&taf=false&cpff=false&pdcf=false&tslf=false&stomo=false&amlf=false&dw=false/
4 Darling, location 2291
5 The Guardian, 17 September 2008
6 The Daily Telegraph, 16 September 2009
7 Presentation by Tim Tookey to UBS Global Financial Services Conference, New York 12 May 2009
8 Darling, location 2581
9 Brown, Beyond the Crash, 65
10 Ellis & Taylor, Banks, bailouts and bonuses, 806
CHAPTER 19: NEMESIS STRIKES
1 Financial Times, 13 November 2008
2 Financial Times, 22 November 2008
3 The Daily Telegraph, 17 November 2008
4 Financial Times, 20 November 2008
5 Financial Times, 13 December 2008
6 HBOS Interim Management Statement, November 2008
7 HBOS Trading Statement, November 2008
8 Financial Times, 13 December 2008
9 The Sun, 12 Jan 2011
10 Financial Times, 14 February 2009
11 The Times, 25 February 2012
12 The Daily Telegraph, 13 June 2011
13 Financial Times, 7 June 2010
14 Financial Times, 9 February 2010
CHAPTER 20: HUNGRY FOR RISK
1 Banking Crisis: dealing with the failure of the UK banks, House of Commons Treasury Committee, HC 416, 1 May 2009, 8
2 Ellis & Taylor, Banks, bailouts and bonuses, 807
3 Banking Crisis: Vol. II Written Evidence, House of Commons Treasury Committee, HC 144, 1 April 2009, 440 para 2.8
4 Ellis & Taylor, 807
5 Tim Tookey to UBS Global Financial Services Conference, New York, 12 May 2009
CHAPTER 21: WHY DIDN’T THEY REALISE?
1 Financial Services Authority FSA/PN/024/2012 9 March 2012
2 Ibid.
3 Ibid.
4 A review of corporate governance in UK banks and other financial industry entities, final recommendations, 26 November 2009
CHAPTER 22: THE DRIVE FOR PROFIT AT ANY PRICE
1 Financial Services Authority FSA/PN/024/2012, 9 March 2012
CHAPTER 23: WHY DIDN’T THE REGULATORS STOP HBOS?
1 FSA statement on HBOS, 11 February 2009
2 The Supervision of Northern Rock; Lessons Learned Review, FSA, March 2008, para. 15–16
3 The Failure of the Royal Bank of Scotland, FSA, December 2011
4 The Supervision of Northern Rock, para. 32
5 The Failure of the Royal Bank of Scotland, 10
CHAPTER 25: GONE, BUT NOT FORGOTTEN
1 Financial Times 5 December 2012
2 The Guardian 8 April 2013
3 http://archive.unitetheunion.org/pdf/Job%204xxx%20A4%20LBG%20-Newsletter%203-12.pdf
4 http://www.bbc.co.uk/news/uk-scotland-glasgow-west-11139277
5 Mail on Sunday, 3 February 2013.
CHAPTER 26: CALLED TO ACCOUNT – AT LAST
1 Parliamentary Commission on Banking Standards ‘An Accident Waiting to Happen: the Failure of HBOS, Fourth Report of Session 2012–13, Volume II. Oral and written evidence, published on 5 April 2013 by authority of the House of Commons London: The Stationery Office Limited
Oral evidence taken before the Parliamentary Commission on Banking Standards
3 December 2012 Sir James Crosby, Andy Hornby HC 606-xvi
4 December 2012 Lord Stevenson of Coddenham HC 606-xvii
CHAPTER 27: RETRIBUTION OF A SORT
1 HL Paper 144 HC 705, published on 4 April 2013 by authority of the House of Commons London: The Stationery Office Limited
Bibliography
BOOKS
Armitage, David, ‘Paterson, William (1658–1719)’, Oxford Dictionary of National Biography (Oxford University Press, 2004), online edn, Sept 2010, [http://www.oxforddnb.com/view/article/21538]
Brown, Gordon, Beyond the Crash (Simon & Schuster, 2010)
Brummer, Alex, The Credit Crunch (Random House Business, 2008)
Cameron, Alan, ‘Holland, John (1658–1721)’, Oxford Dictionary of National Biography, (Oxford University Press, 2004), online edn, Jan 2008, [http://www.oxforddnb.com/view/article/13531]
Cameron, Alan, Bank of Scotland 1695–1995 a very singular institution (Mainstream 1995)
Checkland, S.G., Scottish Banking, a history 1695–1973 (Collins, 1975)
Darling, Alistair, Back from the Brink (Atlantic Books, 2011), Kindle edition
Devine, T.M., The Scottish Nation 1700–2000 (Allen Lane, 1999)
Forrester, Andrew, The man who saw the future (Thomson Texere, 2004)
Green, David, Queen Anne (Collins, 1970)
Peston, Robert, Who runs Britain? (Hodder & Stoughton, 2008)
Saville, Richard, Bank of Scotland: a history, 1695-1995 (Edinburgh University Press, 1996)
Watt, Douglas, The Price of Scotland; Darien, Union and the Wealth of Nations (Luath Press, Edinburgh, 2007)
ANNUAL REPORTS & ACCOUNTS
HBOS, 2001–2010
Bank of Scotland, 1980–2000
Lloyds Banking Group, 2008–10
RESEARCH PAPERS
‘Banks, bailouts and bonuses: a personal account of working in Halifax Bank of Scotland during the financial crisis’, Vaughan Ellis and Margaret Taylor, Work, Employment & Society, December 2010, vol. 24
M. Oram and R. Wellins, Re-engineering’s Missing Ingredient: The Human Factor, IPD, 1995.
OFFICIAL REPORTS
House of Commons Treasury Committee
Banking Crisis: dealing with the failure of the UK banks, HC 416, 1 May 2009
Banking Crisis: Vol.I, HC 261-I, 29 March 2010.
Banking Crisis: Vol.II Written Evidence, HC 144, 1 April 2009
Parliamentary Commission on Banking Standards
An Accident Waiting to Happen: the Failure of HBOS, fourth report of session 2012–13, vols I & II
Financial Services Authority
Bank of Scotland, Final Notice Ref: 169628 9, March 2012
Statement on HBOS, 11 February 2009
The Supervision of Northern Rock; Lessons Learned Review, March 2008
The Failure of the Royal Bank of Scotland, December 2011
Other
State aid No. N 428/2009 – United Kingdom: Restructuring of Lloyds Banking Group, European Commission, Brussels, 18 November 2009
A review of corporate governance in UK banks and other financial industry entities, Final recommendations, 26 November 2009. HM Treasury, 26 November 2009
Final Report Independent Commission on Banking, 12 September 2011
Endnotes
1 By now the Governor was no longer a full-time appointment, but was nonexecutive chairman of the board of directors.
2 We who are about to die salute you – motto of the gladiators of Ancient Rome.
3. See Preface.
4. London Inter-bank Offered Rate: the interest rate at which banks trade among themselves.
5. These rises in top pay were not out of line with the rest of the banking sector. Despite Lloyds’ less stellar performance over the period, the total remuneration of the chief executive rose from £1,100,000 to £2,884,000.
6 I confess to having an MBA, but I have never been a banker.
7 I did my first radio interview at 5.30 a.m. on that day and in total was interviewed separately eight times for BBC radio and television programmes. One interview for independent television was cut into three and used on Channel 4, ITV and STV news. Paul Moore and Andrew Tyrie MP were also extensively interviewed across all television channels.
Index
125 per cent mortgages ref1, ref2
Abbey National ref1, ref2
talks with Bank of Scotland ref1
Act of Union ref1
AIG ref1
Alliance 38; Leicester ref1, ref2
Alt-A mortgages ref1, ref2
Applegarth, Adam ref1, ref2
Bank of China ref1
Bank of England
discourages hostile bids ref1
emergency lending ref1
founded 1694 ref1
Governor of ref1
integrity of banking system ref1
lender of last resort ref1
NatWest rescue ref1
refuses Northern Rock guarantee ref1
regulatory role ref1
special liquidity scheme ref1
Bank of Scotland
Act of Scottish Parliament 1695 ref1
becomes ‘oil bank’ ref1
bid cost ref1
bid tactics ref1
bids for US banks ref1
buys in NZ and Australia ref1
Capital Bank ref1
culture change ref1
custodian philosophy ref1
dismisses DCL approach ref1
early securitisation ref1
enters buy-out market ref1
enters mortgage market ref1
equity stakes ref1, ref2
gap between lending and deposits ref1
high RoE ref1
HOBS electronic banking ref1
HQ on The Mound ref1
increases offer for NatWest ref1
and Jacobite rising ref1
joins FTSE100 ref1
last results ref1
Latin American debt ref1
launches NatWest bid ref1
launches Sainsbury’s Bank ref1
Lloyds makeover ref1
Lloyds’ pledge ref1
MBOs ref1
Money Market Cheque Account ref1
‘most admired bank’ ref1
opens Houston office ref1
partnership with Pat Robertson ref1
praise from Lex ref1
provides credit for M&S customers ref1
rejected by Halifax ref1
reliance on wholesale market ref1
sells Countrywide ref1
shuns derivatives ref1
suffers first bank run ref1
supports Cazenove ref1
talks with Abbey National ref1
tercentenary ref1
watches Royal Bank revolution ref1
Bankwest ref1, ref2, ref3, ref4, ref5
bankers’ pay ref1
banking rules ref1, ref2
BankWest ref1, ref2, ref3
Barclay twins ref1, ref2
Basel Accords ref1, ref2, ref3
Bear Sterns ref1, ref2
Big Bang ref1, ref2
Blackburn, Mike ref1, ref2, ref3
Blank, Sir Victor
cocktail conversation with Brown ref1
faces shareholders ref1
knows Hornby ref1
‘retires’ from Lloyds ref1
Royal Bank director ref1
Bonnie Prince Charlie ref1
Bowie, David ref1
Bradford & Bingley ref1, ref2, ref3, ref4
British Linen Bank ref1, ref2, ref3, ref4
Brown, Gordon ref1, ref2, ref3, ref4, ref5, ref6, ref7
Brown, Howard ref1
building societies ref1, ref2, ref3, ref4, ref5, ref6
deregulation of ref1, ref2
Burt, Sir Peter
attacks RBS management ref1
attempt to save Bank ref1
becomes Chief Executive ref1
becomes Treasurer ref1
concedes NatWest defeat ref1
early career ref1
fears vulnerability ref1
HBOS decision ref1
management style ref1
and Pat Robertson ref1
plans NatWest bid ref1
post-bid illness ref1
rejects Barclays top job ref1
rejects National Australia Bank ref1
reorganises Bank ref1
retires ref1
salary increase ref1
sells £2 million shares ref1
standing ovation ref1
talented golfer ref1
talks with Crosby ref1
Cable, Vince ref1
Cazenove ref1, ref2, ref3, ref4
Chartered Institute of Bankers in Scotland ref1, ref2, ref3, ref4, ref5
City of Glasgow Bank ref1
Clydesdale Bank ref1, ref2, ref3, ref4
Committee of Scottish Clearing Bankers ref1
Company of Scotland see Darien scheme
Co-operative Bank ref1
Countrywide Bank ref1
covered bonds ref1, ref2
Crosby, Sir James
demanding targets ref1
denies stepping down ref1
Edinburgh flat ref1
evidence to parliamentary commission ref1
Halifax chief executive ref1
HBOS chief executive ref1
mortgage study ref1
parliamentary commission criticism ref1
relinquishes knighthood ref1
resigns from FSA ref1
retires early ref1
salary increase ref1
sold HBOS shares ref1
Cummings, Peter
becomes head of corporate banking ref1
calms fears ref1
chairs credit committee ref1
deal making ref1
early career ref1
evidence to parliamentary commission ref1
increased bonus ref1
pressure to boost profits ref1
property speech ref1
redundancy payment ref1
relationship with Sir Philip Green ref1, ref2
resigns ref1
waives bonus ref1
Daniels, Eric
record capital issue ref1
retires early ref1
talks with Hornby ref1
Darien scheme ref1, ref2, ref3
Darling, Alistair ref1, ref2, ref3, ref4, ref5
Dawson, Jo ref1, ref2, ref3
Dickson, Gordon ref1
Dunfermline AFC ref1
Dunstone, Charles ref1, ref2
Duthie, Sir Robin ref1
Ecclestone, Bernie ref1
Ellis, Mike
chairman, Skipton Building Society ref1
evidence to parliamentary commission ref1, ref2
HBOS finance director ref1
Lloyds talks ref1
reassurance on US mortgages ref1
redundancy payment ref1
retires ref1
returns ref1
wins respect ref1
Ellwood, Peter ref1
Fannie Mae and Freddy Mac ref1
Financial Services Authority (FSA) ref1, ref2, ref3, ref4
Fitch ref1
Forte, Sir Rocco ref1, ref2, ref3
Garrick, Sir Ron ref1, ref2, ref3
deputy chairman ref1
evidence to parliamentary commission ref1
parliamentary commission report ref1
Gentlemen’s Agreement ref1, ref2
Gibson, Archie ref1
Glass-Steagall Act ref1
Gleacher, Eric ref1
Goldman Sachs ref1, ref2, ref3, ref4
Goodwin, Fred
becomes chief executive ref1
calms bid rhetoric ref1
Downing Street meeting ref1
plans NatWest bid ref1
stripped of knighthood ref1
Grampian Funding ref1
Grant, Sir Alistair ref1
becomes Governor ref1
fights cancer ref1
Green, Lady Tina ref1, ref2
Green, Sir Philip ref1
deal with Bank ref1
Halifax ref1, ref2, ref3, ref4, ref5
AGM in Edinburgh ref1
nicknamed ‘Haliban’ ref1
Harley, Ian ref1
HBOS
£45 billion write-offs ref1
125 per cent mortgages ref1
40,000 jobs lost ref1
advanced status ref1
> Arcadia dividend ref1
Arrow assessment ref1
Bank of England loans ref1
‘cannot fund own expansion’ ref1
concerns over The Mound ref1
corporate banking failures ref1
corporate governance ref1, ref2
Crest Nicholson ref1, ref2
culture ref1
dependence on short-term funding ref1
directors buy shares ref1
expands branch network ref1
‘flying blind’ ref1
FSA fine ref1
FSA report ref1, ref2
funding problems ref1
governance ref1, ref2
Grampian Funding ref1
guilty of serious misconduct ref1
haemorrhaging cash ref1
high-pressure sales culture ref1, ref2
leverage ref1
leveraged buyouts ref1
Lloyds deal outlined ref1
loses £54 billion ref1
McCarthy & Stone ref1, ref2
merger cleared ref1
mortgage share falls ref1
mortgages repriced ref1
name chosen ref1
property exposure ref1
raises new capital ref1
record share price ref1
reliance on wholesale funding ref1
remuneration report ref1
rides commercial property boom ref1
rights issue flops ref1
risk appetite ref1
select committee report ref1
share buy backs ref1
share debut ref1
shareholder disquiet ref1
shares freefall ref1
short of capital ref1
small business blunder ref1
stresses partnership ref1
strong profit increase ref1
sub-prime loans ref1
takes Government capital ref1
Heseltine, Lord ref1
Higgins, Benny ref1
Hobson, Tony ref1, ref2, ref3
Hodkinson, Phil ref1, ref2, ref3, ref4
Holland, John