* Extensive work already done on review
* HBOS had to be rescued in financial crisis (Adds more detail, background)
By Huw Jones
LONDON, July 11 (Reuters) - The long-running review into why HBOS bank failed will be published by the end of the year now that disciplinary proceedings linked to its collapse have concluded, British financial regulators said on Friday.
HBOS, Britain’s biggest mortgage lender, had to be rescued at the height of the financial crisis in 2008 with a government-engineered takeover by rival Lloyds, which subsequently needed a 20 billion pound ($34 billion) bailout to survive.
The Financial Conduct Authority and the Bank of England said extensive work has already been done on the review, which will summarise why HBOS failed and make any recommendations on how to avoid future collapses.
“The aim is to publish the final report by the end of this year,” the two regulators said in a statement.
They published the final terms of reference for the review that will be used for so-called Maxwellisation over coming months. This refers to the process whereby people criticised in the review have a right of reply before publication.
External independent reviewers have been agreed with parliament’s Treasury Select Committee.
“This approach will provide independent scrutiny and challenge to facilitate the production of a robust report,” the terms of reference said.
Andrew Green, a senior independent lawyer, will write the section that assesses the regulator’s enforcement investigations.
The regulators had to wait for enforcement proceedings against Peter Cummings, the head of corporate lending at HBOS until it was rescued by Lloyds, to be completed before work on the review could start.
Cummings, the only HBOS official to face proceedings, was fined half a million pounds and given a lifetime industry ban in 2012, a ruling he called unfair and sinister.
More former HBOS executives may be brought to book.
The review will offer an opinion “as to whether the regulators should consider afresh whether any other former members of HBOS’s senior management should be subject to an investigation with a view to prohibition proceedings”.
A parliamentary commission on banking standards said last year that HBOS was an accident waiting to happen with bad lending and losses across the business likely to have led to its insolvency even without the funding and liquidity problems during the 2007-09 financial crisis.
Andrew Tyrie, who chairs the treasury committee, said parliament will check if the review is independent enough to reassure the public that the regulators will not pull their punches on the failures of their predecessors.
Although regulators bore some of the blame, primary responsibility for the “colossal failure” lay with Dennis Stevenson, chairman from the formation of HBOS in 2001 until its collapse, and former chief executives James Crosby and Andy Hornby, the parliamentary report said.
The lawmakers asked regulators to consider if Stevenson, Crosby and Hornby should be barred from the industry.
Last year Hornby surrendered 30 percent of his pension from HBOS and asked the UK authorities to remove the knighthood he received just after he left the bank. ($1 = 0.5877 British Pounds) ($1 = 0.5877 British Pounds) (Reporting by Huw Jones; editing by Jane Merriman and Keiron Henderson)