The Banned HBOS Banker

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It is difficult to resist investigating the case of the Banned Banker of HBOS. This particular section of the community is clearly loved by us so much that we have chosen to save their businesses and jobs via billions in bailouts over the past five years. But at the same time we do not seem to like the way that they structure their remuneration, or the way they have a problem with lending to SMEs.

Of course, bankers are still part of a media witch hunt as the blame game of how the Credit Crunch began continues five years on. The most high profile person to be burned at the stake so far is Sir Fred Godwin, who was stripped of his Knighthood despite there being “no wrongdoing” proved by the FSA, so far. Granted, the FSA had to say that in order to deflect its role in terms of leaving the Credit Crunch stable door open between 2006 – 2008, but that particular affair did rather leave a sour taste even if you agree with the punishment.

The latest treatment of a certain Peter Cummings, former head of HBOS’s corporate banking division, also between 2006 – 2008 can be described as taking us from sour to bitter. Indeed, he has described the affair as being Orwellian and sinister. It is hard to disagree with such a conclusion, if only on the basis that it has taken over 4 years to ban Mr Cummings and fine him £500,000 – one wonders how much the investigation cost?

This is far too long a process, if only as far as the protection of the public is concerned, and of course an eternity if this legacy of alleged banking excess was eventually proved innocent. In fact, the only point of efficiency on this case is that the FSA has apparently acted as a One Stop Shop. According to Cummings, the regulator was “lawmaker, judge, jury, appeal court and executioner.” Having everything in house must have saved the taxpayer some money, but leaves the problem of how the FSA can be as good at preventing the risk taking, rather than merely punishing it years after the event.

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