FSA’s HBOS report held up by banker’s legal battle

The Financial Services Authority’s (FSA) report into the failure of HBOS is being delayed by a legal challenge from Peter Cummings, a former senior executive at the bank.

The FSA has been investigating the failure of the bank for three years but will not publish its report until at least next year because Cummings is fighting in court to extricate himself, the Daily Mail reports.

Cummings was responsible for HBOS' loan book, which, due to extensive losses during the credit crisis, led to the bank's rescue takeover by Lloyds in 2008.

He is now fighting with the regulator to prove the whole HBOS board had responsibility for the loans.

Andrew Tyrie, chairman of the Treasury Select Committee, pictured, said the legal battle is prolonging the FSA's enforcement investigation into the culpability of the HBOS directors, further delaying the publication of a report.

In December, the FSA published a report on the collapse of the Royal Bank of Scotland (RBS).

In it, the regulator said its poor supervision of banks before 2008 was partly because of its preoccupation with reforms such as the retail distribution review (RDR).

The report called for closer supervision of banks and tighter regulation.