Former bosses at HBOS in the lead-up to its collapse were "ultimately responsible" for its failure and could face being struck off from working in financial services following the much-delayed publication of damning reports into the bank's demise.
City watchdogs will now look at taking potential further action against former HBOS senior management after a report by Andrew Green QC blasted former regulator the Financial Services Authority (FSA) for its failure to investigate a raft of top bosses.
Only one former HBOS executive, Peter Cummings, has so far been formally investigated and fined.
In a scathing assessment of the FSA's handling of the original inquiries into HBOS, Mr Green said the regulator should have considered investigating ex-chief executives Andy Hornby and James Crosby, as well as past chairman Lord Stevenson.
Current regulators, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), will now review whether to take any enforcement action against the trio of bankers, as well as other managers holding key positions at the lender before its collapse and subsequent taxpayer bailout.
The report named former senior managers at the bank that the FSA should have looked into investigating as Mike Ellis, former finance director, Colin Matthew, ex-head of the international division and Lindsay Mackay, former boss of the treasury division.
But any decision into whether to take action against managers will not come until next year and it could be another 18 months to two years before regulators can enforce bans.
The Green report, which was published alongside the FCA and PRA review into HBOS, said the FSA's failure not to investigate senior management more broadly was "not reasonable".
Regulators are now left powerless to levy fines against any managers deemed responsible due to the length of time that has passed.
But the potential for bans could have implications for some of the senior managers who still work in the financial services industry.
In particular, Mr Ellis is currently chairman of Skipton Building Society, while Mr Mackay is a director of Alpha Bank.
Mr Hornby is chief operating officer of Gala Coral, but would not be affected by a ban from financial services, and the group has so far been supportive of him.
Lord Stevenson has a number of positions, but not in the industry, while James Crosby is also largely retired.
Mr Crosby was stripped of his knighthood at his own request following a report by MPs and peers into HBOS in 2013, which said he was the ''architect of the strategy that set the course for disaster''.
So far Mr Cummings - who ran the commercial arm at HBOS - is the only former director at the bank to have been penalised by the FSA, after being fined £500,000 and banned for life from working in the City.
The FCA and PRA's report also sheds further light on the mismanagement of HBOS before it had to be rescued by Lloyds in 2008.
It also found that auditor KPMG was effectively leant on by HBOS directors to sign off lower bad loan write-offs in 2008 to ease concerns about its finances.
But KPMG is not set to face enforcement action, as its role in the HBOS crisis is not in the scope of the reviews.
Chancellor George Osborne claimed the failings highlighted in today's report demonstrated that "the system of regulation created by the last Labour government failed".
He added: "In the end, this led to a £20 billion bailout of Lloyds Banking Group, funded by the taxpayer."