How much was a key Brown advisor behind the HBOS fall?
The appearance before the commons committee of the bank bosses and the story of the whistle-blower who tried to warn of the dangers of HBOS’s strategy get wide coverage this morning but it’s only really the Times and the Independent that highlight the political dangers to the government.
For until now the main charge against the PM was that he was Chancellor during a critical decade when many of the problems developed. That’s not really stuck because it’s too generalised and not specific enough.
That could change following yesterday’s accounts relating to Sir James Crosby, the ex-CEO of HBOS and now the deputy chairman of the Financial Services Authority (FSA).
What could be problematical for Brown is that Crosby got a knighthood three years on the for his work in financial services and this was on the Government’s recommendation. Last year he carried out a major review of the mortgage market for the Treasury.
This is how Andrew Grice and Nigel Morris in the Indy report it:“The Government’s crisis over the banks deepened last night when one of Gordon Brown’s key advisers was accused of sacking a whistleblower who predicted that reckless lending by banks would end in disaster..The record of Sir James….was called into question in explosive evidence to MPs by a senior official who raised the alarm that the bank was growing too fast and over-reaching itself..Paul Moore, a barrister who was the head of regulatory risk at HBOS from 2002 to 2005, told the Treasury Select Committee that Sir James was the “original architect” of HBOS’s doomed expansion.”
My guess is that David Cameron will try to use this in his allocated six questions during PMQs today. It has the potential to be highly damaging.
Betting markets for the next general election.
Today on PB: I’m in London and will have very little access to my laptop. It’s possible that posts could get held up in moderation for longer periods than usual. A guest slot by Rod Crosby (no relation to Sir James) is scheduled to be published this afternoon and later there should be Roger’s guide to the Oscars. Last year he got it 100% right and those who bet on his predictions did very nicely.