'An accident waiting to happen' : the failure of HBOS, fourth report of session 2012-13, Vol. 1: Report, together with formal minutes

This report finds the three bankers guilty of "catastrophic failures of management" in the run-up to the collapse of HBOS which resulted in its emergency takeover by Lloyds bank. "Toxic" misjudgments by the three led to the bank's downfall.

Lloyds later needed a GBP20.5bn taxpayer bail-out at the height of the financial crisis as a direct result of its acquisition of HBOS.

So far only one former HBOS director, Peter Cummings, has been penalised, after being fined GBP500,000 and banned for life from working in the City last September.

The Commission said it was wrong that he should shoulder the blame alone.

They claim "The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank's board from its birth to its death.", and calls on the new City regulator to consider barring them from taking up any role in the financial sector.

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.

The FSA's failure to act exposes what a flawed regulatory framework was in place and politicians of all parties backed the propping up of the banks with frighteningly expensive bailouts