Hello, my name is Pat McConnell,
an Honorary Fellow
at the Macquarie University
of Applied Finance Centre
in Sydney, Australia.
In this session, I'm going to talk about
the topics of strategic risk in general
and the collapse
of Halifax Bank of Scotland
or HBOS in particular.
On September 18th, 2008,
Halifax Bank of Scotland or HBOS
was purchased by Lloyds Bank
at the direction of the UK government.
It was the largest failure of a bank
in the UK to that point
and has cost the UK taxpayer
over 20 billion pounds so far.
But although the failure
by the global financial crisis,
it was not the root cause,
HBOS had not made too many bad loans.
The root cause was a flawed strategy.
At the time, much of the blame
for the collapse of HBOS
was based on youthful and relatively
untested CEO, Andy Hornby,
a marketing whiz kid hired
from the giant retailer Asda.
However, the seeds of the collapse
had been sown well
before Mr. Hornby had been hired as CEO.
In 2004, the bank's regulator,
the Financial Services Authority
had warned that the bank
was "an accident waiting to happen."