It wasn't all america's fault, it was the banks.

Graham_Devon

Report out on the collapse of HBOS today, where risky lending is concluded to be the main issue.

Of course, senior bosses in HBOS too tried to blame it on the closure of the wholesale markets (not sure where we have heard that before? ), but this has been found to be, well, guff basically.

Senior executives of HBOS tried to blame the losses on the temporary closure of wholesale markets.

During the financial crisis, banks stopped lending to each other, resulting in their short-term supplies of funding drying up.

But members of the commission said they were disappointed by such explanations, as it was the lending approach that was to blame.

"This culture was brash, underpinned by a belief that the growing market share was due to a special set of skills, which HBOS possessed and which its competitors lacked," said the report.

"This was a traditional bank failure, pure and simple. It was a case of a bank pursuing traditional banking activities and pursuing them badly."

"For the first time, blame is squarely pinned on the people who deserve it - the chairman, the two chief executives," he said.

"What they did was to pursue a very fast growth strategy, regardless of the risk and they fooled themselves into thinking that their initial success was [because] they were better than everybody else, but eventually those risks caught up with them."

So that puts that argument to bed

http://www.bbc.co.uk/news/business-22027664

StevieJ

Graham_Devon wrote: »

Report out on the collapse of HBOS today, where risky lending is concluded to be the main issue.

Of course, senior bosses in HBOS too tried to blame it on the closure of the wholesale markets (not sure where we have heard that before? ), but this has been found to be, well, guff basically.

So that puts that argument to bed

http://www.bbc.co.uk/news/business-22027664

Not sure what you mean, the point has been raised here many times that Halifax problems originated from bad loans to business when many on here were trying to pin the blame on reckless mortgages. Just because Halifax would have gone down anyway doesn't mean that others (and the Halifax) didn't suffer from holding dodgy 'AAA' securities and the resultant drying up of liquidity.

Graham_Devon

Oh, has the theory changed now?

I hadn't caught up :undecided

But how do you explain the same excuse from the bank itself if this wasn't the theory?

wotsthat

Graham_Devon wrote: »

Oh, has the theory changed now?

I hadn't caught up :undecided

But how do you explain the same excuse from the bank itself if this wasn't the theory?

I thought the theory was always that HBOS failure was due to poor lending decisions rather than America's fault?

The bank may well have made up all sort of excuses but this report seems to indicate that the management were a bunch of incompetents. Should've let them go bust.

Doesn't say much for the Lloyds management that they were so willing to receive this hospital pass.

dryhat

No mention of a global crime syndicate that has hijacked the world economy then?

CLAPTON

just confirms what we already know that B&B, Northern Rock and HBOS failed although they had no casino banking.


solution is to fireproof casino banking.

ILW

dryhat wrote: »

No mention of a global crime syndicate that has hijacked the world economy then?

No.....................

Thrugelmir

CLAPTON wrote: »

just confirms what we already know that B&B, Northern Rock and HBOS failed although they had no casino banking.

Instead of Casinos. They offered consumers on the High Street. Open access to high jackpot fruit machines. Unfortunately they got the settings wrong and paid out to much.

Thrugelmir

wotsthat wrote: »

Doesn't say much for the Lloyds management that they were so willing to receive this hospital pass.

Took the Treasury 8 months to assess NR's mortgage and loan book before closing it to new business.

Lloyds took 5 months to assess HBOS's mortgage book. Been on the backfoot ever since. With the other issues such as Corporate loans and PPI. Though Lloyds should be able to turn this round into a highly profitable business in the future.

olly300

wotsthat wrote: »

Doesn't say much for the Lloyds management that they were so willing to receive this hospital pass.

Lloyds management had HBOS shoved on them by the government.

I remember the news reports at the time indicating the talks to make a deal for Lloyds to takeover HBOS were intensive as the Lloyds' management didn't want the mess.

Thrugelmir

olly300 wrote: »

Lloyds management had HBOS shoved on them by the government.

Over a weekend in 2008. Just 48 hours. A deal was brokered to save the UK banking system. If RBS and HBOS are the equivalent of what we are witnessing in Cyprus now.

Combined they were some 30 times larger. So the damage which have been felt far and wide.