The Bank of England will examine barring executives over the 2008 near-collapse of mortgage lender HBOS at the height of the global financial crisis.
A long-delayed report into the collapse of the U.K. lender has opened the door for regulators to re-examine executives' roles.
Andy Hornby and James Crosby, former chief executives of the bank who presided over an aggressive growth strategy which brought it to a near-disastrous collapse in 2008, and its former chairman, Lord Stevenson, have never been penalized over the failure. The bank was bought up by another U.K. bank, Lloyds,
The lawyer behind one of the reports said regulators should consider whether or not to take further action against Hornby, currently chief operating officer at Gala Coral, the gambling company.
Ultimate responsibility for the failure of HBOS rests with its Board" the regulators said in the report.
The Bank of England confirmed it was considering "further enforcement action" and will make a decision "as early as possible next year."
"HBOS was at root a simple bank that nonetheless managed to create a big problem," Andrew Bailey, deputy Governor of the BoE, said in a statement.
An earlier inquiry by the Financial Services Authority (FSA), the then U.K. regulator, found against only one former HBOS executive, Peter Cummings, whom it blamed for a "'culture of aggressive growth" when it fined him £500,000 in 2012 and banned him from working in financial services for the rest of his career.
Cummings has since described it as "sinister" that he was the only banker "singled out" after the near-collapse of HBOS under the weight of tens of billions of bad loans at the height of the credit crisis.
However, the delay in the report may mean that no financial punishment can be meted out.
The Financial Conduct Authority, one of the two regulators which has succeeded the FSA, can only fine individuals six years after it discovers alleged wrongdoing. It could still ban individuals from holding financial positions.
U.K. taxpayers were on the hook for a £20.5 billion bailout of Lloyds after it bought HBOS, in response to pressure from then-Chancellor of the Exchequer Alistair Darling and Prime Minister Gordon Brown, as it was feared that if HBOS went to the wall, the U.K. economy would suffer.
The Financial Reporting Council said in a statement: "The Conduct Committee of the FRC has concluded that there were not reasonable grounds to suspect that there may have been misconduct as defined under the disciplinary scheme for members of the accounting profession. The FRC will review the full report to ascertain whether it contains any relevant new information."
Shortly after release of the report, the London-based law firm Ashurst published a statement on behalf of eight former non-executive directors of HBOS. The former execs disagree with a number of conclusions within the report, particularly with the way in which it downplays the unforeseen and unforeseeable effect of the financial crisis on HBOS.
"The report acknowledges that its judgements have been reached with the benefit of hindsight. The report does not contain evidence that would justify any further enforcement action against executives," the law firm stated in the note.
"(The former execs) understand the justified anger about what happened...their only wish now is that current and future bank boards learn to avoid the mistakes that they and others undoubtedly made."