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* 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 whyHBOS bank failed will be published by the end of the year nowthat disciplinary proceedings linked to its collapse haveconcluded, British financial regulators said on Friday.
HBOS, Britain's biggest mortgage lender, had to be rescuedat the height of the financial crisis in 2008 with agovernment-engineered takeover by rival Lloyds, whichsubsequently needed a 20 billion pound ($34 billion) bailout tosurvive.
The Financial Conduct Authority and the Bank of England saidextensive work has already been done on the review, which willsummarise why HBOS failed and make any recommendations on how toavoid future collapses.
"The aim is to publish the final report by the end of thisyear," the two regulators said in a statement.
They published the final terms of reference for the reviewthat will be used for so-called Maxwellisation over comingmonths. This refers to the process whereby people criticised inthe review have a right of reply before publication.
External independent reviewers have been agreed withparliament's Treasury Select Committee.
"This approach will provide independent scrutiny andchallenge to facilitate the production of a robust report," theterms of reference said.
Andrew Green, a senior independent lawyer, will write thesection that assesses the regulator's enforcementinvestigations.
The regulators had to wait for enforcement proceedingsagainst Peter Cummings, the head of corporate lending at HBOSuntil it was rescued by Lloyds, to be completed before work onthe review could start.
Cummings, the only HBOS official to face proceedings, wasfined half a million pounds and given a lifetime industry ban in2012, 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 theregulators should consider afresh whether any other formermembers of HBOS's senior management should be subject to aninvestigation with a view to prohibition proceedings".
A parliamentary commission on banking standards said lastyear that HBOS was an accident waiting to happen with badlending and losses across the business likely to have led to itsinsolvency even without the funding and liquidity problemsduring the 2007-09 financial crisis.
Andrew Tyrie, who chairs the treasury committee, saidparliament will check if the review is independent enough toreassure the public that the regulators will not pull theirpunches on the failures of their predecessors.
Although regulators bore some of the blame, primaryresponsibility for the "colossal failure" lay with DennisStevenson, chairman from the formation of HBOS in 2001 until itscollapse, and former chief executives James Crosby and AndyHornby, 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 fromHBOS and asked the UK authorities to remove the knighthood hereceived 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 KeironHenderson)
