Nearly ten years after the biggest corporate failure in British history occurred, a Professor at the University of Suffolk has taken the opportunity to examine what happened and what can be learnt to prevent a similar incident again.
Professor Atul Shah has published The Politics of Financial Risk, Audit and Regulation: A Case Study of HBOS, the first comprehensive multi-disciplinary academic study of the collapse which uncovers evidence on the power and politics of large financial institutions. The latest figures from the collapse of HBOS show losses of over £52 billion.
The research finds that the management of HBOS, a major national bank with a long history of prudence prior to the merger in 2001, were allowed to act incompetently. Auditors and regulators failed to act, ignoring a key senior whistleblower, and the ‘competitive’ stock market failed to spot management failure in time.
The Professor of Accounting and Finance at the Suffolk Business School, University of Suffolk, details the processes and degrees to which financial challenge and regulation are undermined by this power.
Professor Shah explains “My latest book is based on several years of research at the University of Suffolk. This book analyses microscopically the causes of the HBOS collapse, the largest corporate failure in British history and points to dramatic reform of finance education, culture and ethics, work which is being pioneered here at the University.”
“I have sifted through hundreds of interviews, papers and documents, plus evidence from the whistleblower, Paul Moore. This objective, public spirited, and independent study of the fiasco uncovers a much wider malaise. Whilst the leadership and the Board were responsible for the mis-management and outright hubris and greed, the auditors and regulators also failed in their critical role to challenge in a timely way. Politicians were captured, and also caught up in the sudden boom in finance which made them look good, albeit temporarily.”
The account is said to be essential reading for students, researchers and professionals involved in banking, finance, credit infrastructure, economics and management studies.
Lord Andrew Phillips said “Professor Shah has produced an unconventional, emotional and invaluable post-mortem of the ethical dimensions of the HBOS scandal. It calls on our business schools to help students cope with the deep moral challenges they are likely to face in an increasingly amoral business world. En-route, he holds up Paul Moore as the exemplar of what is needed. But the whole establishment is implicated.”
The Politics of Financial Risk, Audit and Regulation: A Case Study of HBOS by Professor Atul Shah is published by Routledge and available now.
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