Newspaper article The Evening Standard (London, England)

They Were Still in Denial, All the Way to the Precipice

Newspaper article The Evening Standard (London, England)

They Were Still in Denial, All the Way to the Precipice

Article excerpt

Byline: Neil Collins

REVENGE, as everyone knows, is a dish best served cold, and Paul Moore must be feeling satisfied today. It's nearly four years since he was sacked by Sir James Crosby and for much of that time his claims, that he had been pushed out because of his warnings about the risks that HBOS was running, were ignored. Even last year, as the banks were sliding into the mire, his protests on the BBC did not gain much traction.

This week, it's been different. The Treasury Select Committee fired the bullets, and within hours Crosby had quit as deputy chairman of the Financial Services Authority. Moore, who had been Head of Group Regulatory Risk at HBOS between 2002 and 2005, had his revenge.

This episode encapsulates the banking crisis, and sheds a little light on why we have sunk so deep into the mire. Moore is a barrister, an experienced accountant, and seems eminently qualified to judge banking risk. Two years into the job, there would not have been much doubt about his competence, but by June 2004 he was complaining to the HBOS finance director about obstacles in his path. His concerns about his conflict with the retail banking division were ignored.

By 2005, it was clear that the relationship had broken down, and that he had to go. The right governance boxes were ticked, but the decision to fire him was ultimately Crosby's, then in his fourth year as chief executive. Everyone, from the HBOS board to the FSA and the investigating accountants from KPMG, satisfied themselves that Moore's allegations were without foundation.

Since leaving HBOS, Crosby had not only joined the regulator, but has become our Dear Leader's tame expert on the mortgage market, that bubble which Brown and banks colluded to inflate to the point where buyers were guaranteed years of misery and negative equity. …

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