Pressure is building on Mike Ellis, the former financial director of HBOS, to resign as chairman of Skipton Building Society after a report last week spelt out the “colossal failure” by the bank’s executives in the run-up to its collapse in 2008.
Mr Ellis was approved for his new role by the Financial Services Authority in 2011, two years after leaving his post at the stricken HBOS, which was taken over by Lloyds Banking Group.
Politicians and campaigners are now saying Mr Ellis should be ousted from his current role. Brooks Newmark, a Conservative member of the Treasury select committee, told the Financial Times: “If one guy is supposed to be on top of the numbers and the risk to the bank it is the finance director.”
Mr Ellis was not named in the banking commission report, which accused senior management of overseeing poor governance and weak credit controls.
But Mr Newmark said Mr Ellis was implicated by having been in an important risk management role at the time of its failure. He said: “Either he knew and was complicit and shouldn’t have that job or he didn’t and was too stupid and shouldn’t have that job.”
In Skipton’s annual report, published last month, Mr Ellis boasted of overseeing “a blend of prudent and cautious financial management”. Lord Oakeshott, Liberal Democrat former Treasury spokesman, said: “How can he be confident in prudent and cautious financial management? If he and his colleagues had even half an eye open, we taxpayers wouldn’t be stuck with a £20bn bill for bailing out HBOS.”
Skipton said it had full confidence in Mr Ellis but that he declined to comment himself.
Mr Newmark also criticised the FSA for approving Mr Ellis’ appointment at a time it was boasting of its tight supervision of banking executives.
He said: “The regulator is very reluctant to penalise its own.”
A spokesman for Pirc, the shareholder rights group, said: “Neither the FSA nor the Financial Reporting Council seem to be doing anything.”
The Financial Conduct Authority, which has taken over authorisations from the now-shut FSA, declined to comment on Mr Ellis specifically.
But a spokesman said the tougher authorisation process was introduced in 2008 “to ensure the right people were approved to carry out senior roles in regulated firms that pose the highest risk to our objectives”.
Mr Ellis, who worked at HBOS from 2001 to 2004 and again from 2008 to the forced merger with Lloyds, told the commission in November that the bank was in “a very strong position” when he left in 2004 and that he had focused on reining in asset growth during his second stint because “funding and liquidity were the burning issue.”
The scrutiny of Mr Ellis follows a week of recriminations as former executives found themselves in the spotlight following the report’s publication.
The most high profile of these was Sir James Crosby, the former HBOS chief executive who asked to give up his knighthood and a third of his £580,000-a-year on Monday under pressure from MPs and peers to do so.
Other former senior HBOS executives, however, including Andy Hornby, Sir James’ successor and Lord Stevenson, who was chairman at the bank, have refused to bow to pressure to follow Sir James’ lead.
Criticism has also been levelled at John Griffith-Jones, the chair of the FCA, who was chairman of KPMG at the time the accountancy firm was auditing HBOS. Neither Mr Griffith-Jones nor KPMG were singled out for criticism in the commission’s report.
The FCA has insisted Mr Griffith-Jones is not involved in its HBOS investigation but Mr Newmark said: “This is the culture of the old City – people slide from one failure straight into another job. That culture has to stop now.”
Get alerts on UK banks when a new story is published