The Bank of England and the Financial Conduct Authority places KPMG under pressure to detail how the giant accountancy firm failed to alarm authorities over the quality of HBOS’ loan book before it even collapsed.
Chair of the Treasury Select Committee and previously the Parliamentary Commission on Banking Standards Andrew Tyrie said:
“It’s clear from this report that the audit process was an important part of the story of HBOS’s failure.
“They will need to consider afresh… that there were no grounds for an investigation of KPMG [and] relevant senior KPMG people,” said Mr Tyrie. He added: “It is surprising that the FRC didn’t conclude, and a long time ago, that this work was needed – not least to provide greater public confidence about bank audits after the catastrophe of 2008.”
KPMG Was “Careless”
The auditor KPMG was reckless, according to HBOS Whistleblower Paul Moore.
KPMG was tasked to have told investors before the bank collapsed that HBOS only survived due to special liquidation measures from the Bank of England. The market did not know about this, which made it a deliberate misinterpretation of a material fact.
Moore was dismissed in 2004 sacked by James Crosby, the former HBOS Chief Executive, after his warning of the bank’s high risk and toxic financing and product mis-selling.