Auditors: Market concentration and their role - Economic Affairs Committee Contents


Further supplementary evidence from Mr Timothy Bush (ADT 16)

CATEGORISATION OF BANKING FAILURES BY ACCOUNTING ISSUE

Accounting Problem Treasury Assets collapsingBanking Books collapsing Trading Books collapsing
Bad debt provisioning insufficient to protect creditors and very growth expansionary
* lack of contingent liability assessment ("make good" clauses in securitisations).
Fatalities (>100% of capital lost)
Allied Irish Bank
Anglo Irish Bank
Bank of Ireland
Bradford & Bingley*
Cattles (non bank lender)
HBOS (Bank of Scotland)
London Scottish Bank
Northern Rock*
Near miss (rescued):
Alliance & Leicester plc
Dunfermline BS and several other building societies
Mark to market gains covering up losses (Collateralised Debt Obligations), then met by mark to market downswing Most banks exposed. HSBC had MtM losses at one point approaching £20bn (these then substantially reversed). Fatalities (>100% of capital lost) ABN AMRO part of RBS Near miss: RBS (ex-ABN AMRO) Barclays
ImpactMarket rise and then panic. Regulatory forbearance needed. Tremendous market dislocation. Bankruptcy/nationalisation and/or forced dilution. Massive loss of capital and contraction. In case of RBS/Lloyds-HBOS/B&B/Northern Rock nationalisation. London Scottish in administration. Tremendous market dislocation.
Auditors
Auditors of failed banks PWC Bank of Ireland, Cattles, Northern Rock KPMG Allied Irish, HBOS, London Scottish, Bradford & Bingley E&Y Anglo Irish E&Y Netherlands ABN AMRO
Auditors of "victim" banks/survivors (victim meaning acquired collapsing banks) KPMG HSBCPWC Lloyds Deloitte RBS PWC Barclays





 
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