A financial services academic who has written a book on the collapse of HBoS hopes it will help drive greater focus on culture and ethics in an industry in “urgent” need of practice reform.
Atul K Shah, a professor of accounting and finance at the University of Suffolk, says he wrote The Politics Of Financial Risk, Audit And Regulation – A Case Study Of HBoS after interviewing whistleblower Paul Moore, the lender’s former head of group regulatory risk.
“That really got me deep into the whole HBoS affair,” Shah says. “It is the largest corporate failure in British history so it was calling out to be written.”
The professor says he has aimed, with the book, to merge his understanding of complex legal jargon with great public anger about finance, revealing “how the mismanagement was done and the ideological support that also permitted the mismanagement” as well as “weak” regulation.
The bank had to turn to emergency UK government aid in 2008 and was later overtaken by Lloyds Banking Group, receiving a collective £28 billion cash injection.
Shah believes ethics, culture and business education remain under-prioritised in financial services, but they are “slow burners” in his view. “People are still looking for large returns very quickly.” He also flagged the pivotal role of faith and morality in the history of finance north of the Border, noting Bank of Scotland’s “very prudent and very conservative” origins. “You could say my book is trying to remind Scotland to go back to its own roots around culture and ethics,” he said.
He also says he is able to look at the issue from an outsider’s viewpoint . “We need a fresh and authoritative perspective,” he says.