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Monday April 13, 2009

UK finance watchdog to investigate banks in connection with financial collapse


LONDON: Britain's financial watchdog is planning to investigate the conduct of banking bosses in the run-up to last year's bailouts which saw billions of pounds (dollars) of taxpayer money put up to save the country's ailing finance sector, a newspaper said Sunday.

The Sunday Telegraph said the Financial Services Authority was drafting audit firms to help them look at what happened at institutions such as the Royal Bank of Scotland Group PLC and HBOS Group PLC before they ran into trouble.

The paper said the FSA would look at the conduct of bank directors, investigate how the banks evaluated risk, and see whether enough information was made available to banks' boards and investors.

The paper cited unidentified sources within the accounting industry.

The FSA declined to comment on the report. The British government stepped in to shore up its shaky banking system with a 37 billion pound rescue package in October.

Even before then, HBOS had to be taken over by rival Lloyds TSB to keep it from collapsing.

But the massive cash infusion was not enough, and in January the government had to step in with another multibillion pound bailout which has seen vast swaths of Britain's once-proud banking sector become property of the U.K. taxpayer. - AP


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