Sir Nicholas Monck, former Second Permanent Secretary at the Treasury, Stuart Bernau, former chairman and chief executive of Chelsea Building Society, and Iain Cornish, former chief executive of the Yorkshire Building Society, will head the panel.
The decision follows the fact that the FSA's previous report into the failure of RBS was only published following pressure from the Treasury Select Committee and was scrutinised by Sir David Walker and Bill Knight.
The report into the failure of HBOS will include a high level analysis of the balance sheets of Halifax and Bank of Scotland from 1998-2001 and of the merged balance sheet of HBOS in 2001-05, focusing on capital and leverage ratios. It will not examine the causes and consequences of the Lloyds/HBOS merger but will examine the quality of the HBOS loan book in 2008.
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The panel will review whether the report is a fair and balanced reflection of the available evidence and is a fair and balanced summary of the FSA's regulatory and supervisory activities in the run-up to the failure.
The FSA will supply drafts of the report to the panel and may be asked to reconsider aspects of the report before it is published. Any significant alterations will be reported to the Treasury Select Committee.
Andrew Tyrie MP, chairman of the Treasury Select Committee, said: "I am pleased the Treasury Committee has been able to secure such high quality specialists to review the FSA's report. They have an important job to do.
"The FSA's previous report into RBS laid bare serious failures both within RBS and the regulator. Without persistant pressure from the Treasury Committee, that report would never have been produced and Parliament and the public would have been none the wiser."
"These reports are needed to guide regulatory reform in the UK. Unless regulators are frank about what went wrong last time there will be little chance of avoiding a repetition in the future."

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