The report into the collapse of HBOS has recommended that regulators should consider whether former bosses at the bank should be banned from the finance industry.

The review also concluded that flaws in the former Financial Services Authority’s supervisory approach meant it “did not appreciate the full extent of the risks HBOS was running.”

Therefore, the FSA “was not in a position to intervene before it was too late.”

The review by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) concluded that ultimate responsibility for the failure of HBOS rested with its board and senior management.

HBOS, which included the operations of Halifax and Bank of Scotland, had to be rescued in a takeover by rival Lloyds in 2008 that was encouraged by the UK government. Lloyds itself was then bailed out at a cost of 20 billion pounds.

HBOS chief executive when it collapsed was Andy Hornby, now a senior executive at gambling company Gala Coral, and its chairman was Dennis Stevenson. Lindsay Mackay, former chief executive of HBOS’s treasury division, is currently chief executive at Alpha Bank London Limited.

Through a statement via law firm Ashurst, Stevenson and seven other former non-executive directors at HBOS said they disagreed with a number of the report’s conclusions.

They said the report downplayed the unforeseen impact of the financial crisis on HBOS and it did not contain evidence that would justify any enforcement action.

The report said the top executives failed to set an appropriate strategy for the firm’s business and “failed to challenge a flawed business model which placed inappropriate reliance on continuous growth without due regard to risks involved.”

Andrew Bailey, deputy governor of the Bank of England and chief executive of the PRA said: “The story of the failure of HBOS is important both to provide a record of an event which required a major contribution by the public purse, and because it is a story of the failure of a bank that did not undertake complicated activity or so-called racy investment banking.

“HBOS was at root a simple bank that nonetheless managed to create a big problem.”

Brian Pomeroy, senior independent director at the Financial Conduct Authority, said the review examined about a quarter of a million documents and held interviews with 80 people.

“While much has already been written about the failure of HBOS, I believe this to be the definitive account and to be a thorough, fair and balanced view of what occurred,” said Pomeroy.

As part of the review, Andrew Green QC was asked to provide an independent assessment of whether the decisions taken on enforcement by the former regulator, the FSA, were reasonable.

In his report, Green recommended that the PRA and FCA “should now consider whether any former senior managers of HBOS should be the subject of an enforcement investigation with a view to prohibition proceedings.”