11-02-2009, 02:38 PM
Guess who appointed Crosby to the FSA?
http://www.timesonline.co.uk/tol/news/po...708234.ece
From Times Online
February 11, 2009
Top banker Sir James Crosby quits after whistleblower claims
![[Image: crosby_2_485068a.jpg]](http://www.timesonline.co.uk/multimedia/archive/00485/crosby_2_485068a.jpg)
Sir James Crosby at his home near Harrogate today hours before the resignation was announced
Philip Webster, Political Editor and David Byers
The deputy head of the country's financial watchdog resigned today after Gordon Brown withdrew confidence in him over damaging allegations from a bank whistleblower.
Sir James Crosby, the former HBOS chief executive, was revealed yesterday to have personally dismissed his former head of risk, Paul Moore, who raised fears that the bank was growing too fast.
Sir James was later appointed by Mr Brown as deputy chairman of the Financial Services Authority and was an adviser to the Treasury.
He resigned minutes after today's daily lobby briefing for journalists at which the Prime Minister's spokesman was asked whether he had full confidence in him. He would only answer: "These are serious allegations but they are contested allegations."
The City chief with close ties to Brown
The spokesman also revealed that the Treasury was in contact with the FSA this morning about the issue of Sir James’s handling of the Moore case.
The lack of a full endorsement by Mr Brown was the clearest sign that Sir James’s role was in jeopardy, and he resigned immediately afterwards.
Later, the Prime Minister told the Commons said that Sir James' resignation was the right step to take if he wished to defend himself against the allegations.
"It is right that we investigate serious allegations that are made about the banking system. These are serious but contested allegations," he said.
"In relation to Sir James Crosby, these are allegations that he will wish to defend so it is right that he has stepped down as vice chairman of the Financial Services Authority."
During a heated exchange at Prime Minister’s Questions, David Cameron demanded that Mr Brown admit that he had shown an error of judgment in appointing Sir James as deputy chairman of the FSA. Mr Brown pointed out that KPMG had found in an investigation in 2005 that the allegations were not substantiated.
The Tory leader hit back: “Sir James Crosby has had the decency to resign. Why can’t the Prime Minister have the decency to admit he has got something wrong?”
Mr Cameron said the Prime Minister had set up the regulatory system that had "failed”, and he pointed out that Mr Brown had given Sir James his knighthood.
The explosive allegations which led to Sir James's resignation were made when four former banking chiefs were grilled before the Treasury Select Committee yesterday. During the testimony, it was revealed that Mr Moore had said that his job at the time "felt a bit like being a man in a rowing boat trying to slow down an oil tanker".
Mr Moore, a former partner of KPMG who was head of group regulatory risk at HBOS between 2002 and 2005, accused the bank of "a total failure of all key aspects of corporate governance" and pointed the finger of blame firmly at Sir James, whom Mr Darling asked last April to review the problems in the mortgage market.
By dismissing him without good reason, HBOS broke in-house rules, he said, and he was replaced by Jo Dawson, a sales manager with less experience of risk management – a "personal" appointment by Sir James against the wishes of other directors.
The allegations came at a time when the banks' risk-taking has come in for huge criticism as Britain slides into recession.
***
http://business.timesonline.co.uk/tol/bu...702655.ece
From Times Online
February 10, 2009
HBOS whistleblower: statement of evidence
Times Online
Memorandum from Paul Moore, Ex-head of Group Regulatory Risk (GRR) at HBOS
Background and credentials
- I was head of Group Regulatory Risk (GRR) at HBOS between 2002 and 2005. I reported to the chief financial officer (CFO), Mike Ellis. I had formal responsibility for the bank’s policy and oversight of executive management’s compliance with Financial Services Authority (FSA) regulation.
- From an FSA perspective, I was the Approved Person at the relevant time for the Control Functions 10 (Compliance Oversight) and 11 (Anti Money-Laundering).
- Prior to joining HBOS, between 1995 and 2002, I was a Partner in KPMG’s Financial Sector Practice in London specialising in regulatory services where I advised quite a number of FTSE 100 clients on regulatory matters.
- I have been involved in UK Financial Sector regulation since it began in 1986. I am a Barrister by profession.
Summary of main points
- I believe that there are important general lessons to be learned from my personal experiences as a risk and compliance professional at HBOS and elsewhere that could assist the Committee and others in the public policy debate about what needs to be changed in the governance and regulatory system to help to ensure that the same risks are mitigated in the future.
In my view, as an experienced risk and compliance practitioner, the problem in finding the real cause of the banking crisis is being made more complex than it needs to be.
- I believe that we are missing the wood for the trees and that the key solutions to prevent such an event happening again are simpler than we think. In relation to policy changes, I make some short recommendations that the Committee may wish to consider in section 4 below.
- But let’s start with the cause and this fairly obvious proposition: even non-bankers with no “credit risk management” expertise, if asked (and I have asked a few myself), would have known that there must have been a very high risk if you lend money to people who have no jobs, no provable income and no assets.
If you lend that money to buy an asset which is worth the same or even less than the amount of the loan and secure that loan on the value of that asset purchased and, then, assume that asset will always to rise in value, you must be pretty much close to delusional? You simply don’t need to be an economic rocket scientist or mathematical financial risk management specialist to know this. You just need common sense. So why didn’t the experts know? Or did they but they carried on anyway because they were paid to do so or too frightened to speak up?
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http://www.timesonline.co.uk/tol/news/po...708234.ece
From Times Online
February 11, 2009
Top banker Sir James Crosby quits after whistleblower claims
Sir James Crosby at his home near Harrogate today hours before the resignation was announced
Philip Webster, Political Editor and David Byers
The deputy head of the country's financial watchdog resigned today after Gordon Brown withdrew confidence in him over damaging allegations from a bank whistleblower.
Sir James Crosby, the former HBOS chief executive, was revealed yesterday to have personally dismissed his former head of risk, Paul Moore, who raised fears that the bank was growing too fast.
Sir James was later appointed by Mr Brown as deputy chairman of the Financial Services Authority and was an adviser to the Treasury.
He resigned minutes after today's daily lobby briefing for journalists at which the Prime Minister's spokesman was asked whether he had full confidence in him. He would only answer: "These are serious allegations but they are contested allegations."
The City chief with close ties to Brown
The spokesman also revealed that the Treasury was in contact with the FSA this morning about the issue of Sir James’s handling of the Moore case.
The lack of a full endorsement by Mr Brown was the clearest sign that Sir James’s role was in jeopardy, and he resigned immediately afterwards.
Later, the Prime Minister told the Commons said that Sir James' resignation was the right step to take if he wished to defend himself against the allegations.
"It is right that we investigate serious allegations that are made about the banking system. These are serious but contested allegations," he said.
"In relation to Sir James Crosby, these are allegations that he will wish to defend so it is right that he has stepped down as vice chairman of the Financial Services Authority."
During a heated exchange at Prime Minister’s Questions, David Cameron demanded that Mr Brown admit that he had shown an error of judgment in appointing Sir James as deputy chairman of the FSA. Mr Brown pointed out that KPMG had found in an investigation in 2005 that the allegations were not substantiated.
The Tory leader hit back: “Sir James Crosby has had the decency to resign. Why can’t the Prime Minister have the decency to admit he has got something wrong?”
Mr Cameron said the Prime Minister had set up the regulatory system that had "failed”, and he pointed out that Mr Brown had given Sir James his knighthood.
The explosive allegations which led to Sir James's resignation were made when four former banking chiefs were grilled before the Treasury Select Committee yesterday. During the testimony, it was revealed that Mr Moore had said that his job at the time "felt a bit like being a man in a rowing boat trying to slow down an oil tanker".
Mr Moore, a former partner of KPMG who was head of group regulatory risk at HBOS between 2002 and 2005, accused the bank of "a total failure of all key aspects of corporate governance" and pointed the finger of blame firmly at Sir James, whom Mr Darling asked last April to review the problems in the mortgage market.
By dismissing him without good reason, HBOS broke in-house rules, he said, and he was replaced by Jo Dawson, a sales manager with less experience of risk management – a "personal" appointment by Sir James against the wishes of other directors.
The allegations came at a time when the banks' risk-taking has come in for huge criticism as Britain slides into recession.
***
http://business.timesonline.co.uk/tol/bu...702655.ece
From Times Online
February 10, 2009
HBOS whistleblower: statement of evidence
Times Online
Memorandum from Paul Moore, Ex-head of Group Regulatory Risk (GRR) at HBOS
Background and credentials
- I was head of Group Regulatory Risk (GRR) at HBOS between 2002 and 2005. I reported to the chief financial officer (CFO), Mike Ellis. I had formal responsibility for the bank’s policy and oversight of executive management’s compliance with Financial Services Authority (FSA) regulation.
- From an FSA perspective, I was the Approved Person at the relevant time for the Control Functions 10 (Compliance Oversight) and 11 (Anti Money-Laundering).
- Prior to joining HBOS, between 1995 and 2002, I was a Partner in KPMG’s Financial Sector Practice in London specialising in regulatory services where I advised quite a number of FTSE 100 clients on regulatory matters.
- I have been involved in UK Financial Sector regulation since it began in 1986. I am a Barrister by profession.
Summary of main points
- I believe that there are important general lessons to be learned from my personal experiences as a risk and compliance professional at HBOS and elsewhere that could assist the Committee and others in the public policy debate about what needs to be changed in the governance and regulatory system to help to ensure that the same risks are mitigated in the future.
In my view, as an experienced risk and compliance practitioner, the problem in finding the real cause of the banking crisis is being made more complex than it needs to be.
- I believe that we are missing the wood for the trees and that the key solutions to prevent such an event happening again are simpler than we think. In relation to policy changes, I make some short recommendations that the Committee may wish to consider in section 4 below.
- But let’s start with the cause and this fairly obvious proposition: even non-bankers with no “credit risk management” expertise, if asked (and I have asked a few myself), would have known that there must have been a very high risk if you lend money to people who have no jobs, no provable income and no assets.
If you lend that money to buy an asset which is worth the same or even less than the amount of the loan and secure that loan on the value of that asset purchased and, then, assume that asset will always to rise in value, you must be pretty much close to delusional? You simply don’t need to be an economic rocket scientist or mathematical financial risk management specialist to know this. You just need common sense. So why didn’t the experts know? Or did they but they carried on anyway because they were paid to do so or too frightened to speak up?
Page 1 of 9
NEXT PAGE
The shadow is a moral problem that challenges the whole ego-personality, for no one can become conscious of the shadow without considerable moral effort. To become conscious of it involves recognizing the dark aspects of the personality as present and real. This act is the essential condition for any kind of self-knowledge.
Carl Jung - Aion (1951). CW 9, Part II: P.14