Britannia Radio

It seems that yesterday wasn't wasted after all.  After the hyped 
appearance of the heads of two banks fell flat the real meat was to 
come, thanks to Tory MP Andrew Tyrie  who electrifiued the whole 
procedings

All the papers today - well almost all - lead with Paul Moore's 
devastating exposure of  the origins of the HBOS disaster which tried 
and failed to stop,  HE lost his job while the man who got rid of him 
has been promoted to be Gordon Brown's chief adviser on the mortgage 
market (which he wrecked).

Below I give story as told by The Telegraph and if you watch the 
attached video clip you'll hear Sir Fred Goodwin of RBS say that 
nobody saw it coming!   Ahem!  Paul Moore saw it comoing and got the 
sack for saying so!

After the main story I confine this posting to comments and any other 
facts that have surfaced.


LATE NEWS Brown's ally Crosby quits
CITY regulator Sir James Crosby quits his job at the Financial 
Services Authority

As things are moving so fast I will stop my trawl of the media at 
that point and post this.  I will return to it later.
========================
TELEGRAPH       11.2.09
Senior HBOS executive 'sacked for warning of banking crisis'
Paul Moore, a senior executive at HBOS, was sacked by one of Gordon 
Brown's favoured bankers after warning his bosses they were taking 
excessive risks, MPs were told.

By Andrew Porter, Political Editor

The former head of risk at HBOS - one of the biggest casualties of 
the banking meltdown - told the Treasury Select Committee how he 
predicted the bank's practices could "lead to disaster".

He informed the bank's board of his concerns, but was later sacked by 
Sir James Crosby, the bank's former chief executive.

Sir James is now the deputy chairman of the Financial Services 
Authority, the watchdog tasked with monitoring wrong doing in the 
City. He was appointed by the Treasury and has also carried out a 
wide ranging investigation into the mortgage market for the Prime 
Minister.

In his evidence, Mr Moore told MPs "anyone whose eyes were not 
blinded by money, power and pride" would have realised problems were 
mounting for HBOS and the other high street banks.

However, he claimed he was replaced by someone with no experience for 
voicing his fears. HBOS would later become one of the highest profile 
victims of the credit crisis. Ultimately, it had to be taken over by 
LloydsTSB last year.

Mr Moore's disclosures provide the most stark evidence yet of bank 
boards refusing to question their business models at the height of 
the banking and credit boom.

In a damning testimony, submitted to the Treasury committee's inquiry 
into the banking sector, Mr Moore said it was clear that "excessive 
consumer credit based on massively increasing property prices" was 
bound to cause problems.

But he said no one felt able to speak out because of the "fear" of 
the executives who were being paid vast sums.

The select committee heard that it was Sir James who made the 
decision to sack Mr Moore.

In his evidence Mr Moore, who was head of Group Regulatory Risk at 
HBOS between 2002 and 2004, wrote: "I certainly knew that the bank 
was going too fast (and told them) had a cultural indisposition (and 
told them) and was a serious risk to financial stability .and 
consumer protection (and told them.)"

He said he told the board they "ought to slow down" and that their 
sales culture was "significantly out of balance with their systems 
and controls."
Mr Moore claimed he had been told by the FSA that he was doing a good 
job, but that this was dismissed by Sir James. He sued for unfair 
dismissal and the claim was settled.

He added: "I was subjected to a gagging order but have decided to 
speak out now because I believe the public interest demands it.

"After I was dismissed and to prove just how seriously HBOS took risk 
management, I was replaced by a new group risk director who had never 
carried out a role as a risk manager of any type before."

He concluded: "Sadly, no one wanted or felt able to speak up for fear 
of stepping out of line with the rest of the lemmings who were busy 
organising themselves to run over the edge of the cliff behind the 
pied piper CEOs and executive teams that were being paid so much to 
play the tune and take them in that direction."

Two former HBOS executives were quizzed by the Treasury select 
committee over Mr Moore's dismissal. George Mudie, a Labour committee 
member, said: "At the end of the day you sacked your group risk 
fellow. Now, four years later it turns out he was right and you were 
wrong."

Lord Stevenson, the former chairman of HBOS, replied: "I remember the 
incident very well. It was taken very seriously by the board."  [Eh? 
It was rejected!  -cs]

Last night George Osborne, the shadow chancellor, said: "Paul Moore 
has made very serious allegations about how his warnings about the 
risks being run at HBOS were dismissed by the then chief executive, 
James Crosby.
"Given that as Chancellor, Gordon Brown appointed Sir James as Deputy 
Chairman of the FSA and that as Prime Minister he relies upon him as 
a key economic adviser, the Government need urgently to investigate 
the allegations and discover the truth.

"What is at issue here is Gordon Brown's judgement and the people he 
takes advice from."

HBOS collapsed because of the failure of the very business model that 
allowed it to expand rapidly.

The bank operated with a huge £198bn so-called "funding gap" - the 
difference between customer deposits and customer loans. The gap was 
filled by borrowing on wholesale international money markets. But 
from 2007, those markets effectively froze as investors took fright, 
leaving HBOS unable to raise money and teetering on the brink.

Sir James was unavailable for comment.

But Mr Moore said: "One final observation I would make about the HBOS 
disaster is this: wasn't it actually Sir James Crosby rather than 
Andy Hornby (HBOS chief executive) who was the original architect of 
the HBOS retail strategy?

"Sir James is still deputy chairman of the FSA and advises the 
Government on how to solve the mortgage crisis. Some might now 
question what his 'contribution to financial services' has been when 
this will have led to millions of people in excessive debt, 10,000s 
who will lose their jobs and many more who balance sheets have been 
impacted by precipitous fall of the HBOS share price."

Mr Moore has previously accused Halifax bosses, including ex-Asda 
executive Mr Hornby, of abandoning the bank's conservative roots in a 
reckless rush for market share.
========================
LATE NEWS   TIMES   11.2.09
Top banker Sir James Crosby quits after whistleblower claims

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 excecutive, was revealed 
yesterday to have personally dismissed his former head of risk who 
raised fears that the bank was taking excessive risks.

Paul Moore said that he was fired personally by Sir James after 
repeatedly warning 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.

When questioned by journalists at today's daily lobby briefing, the 
Prime Minister's spokesman would say only: "These are serious 
allegations." It was the clearest sign that Sir James's role was in 
jeopardy, and he resigned immediately afterwards.

Mr Moore, a former partner of KPMG, was head of group regulatory risk 
at HBOS between 2002 and 2005.

The explosive allegations which led to Sir James' 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".

He 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
========================
Comments and extracts from (some) other sources:-
1. Telegraph
=== (Leader)
It's not just bankers who should be in the stocks
Commons confessional was a small step in the right direction.

The spectacle of RBS's former bosses, Sir Fred Goodwin and Sir Tom 
McKillop, and their counterparts at HBOS, Lord Stevenson and Andy 
Hornby, being put in the stocks at Westminster yesterday was a 
cathartic moment in the banking crisis. Their actions not only caused 
immense damage to their own businesses but have shaken the entire 
economy to the core. It was important they were held to account.

As the quartet testified before the Treasury Select Committee, there 
was no shortage of contrition for the havoc they have wreaked. Yet 
while most of their reputations may be in shreds, the four bankers 
actually put up a robust defence of their actions. They argued that 
even the most egregious of their mistakes - RBS's purchase of the 
Dutch bank ABN Amro after the credit bubble burst; HBOS's lunatic 
over-exposure in the property market - may look disastrous "with the 
benefit of hindsight" but did not do so at the time.

Such special pleading sounded rather lame when it emerged that HBOS's 
head of risk, Paul Moore, warned as long ago as 2004 that the bank 
was expanding too fast and this was posing "a serious risk to 
financial stability and consumer protection". The bank's response? It 
fired Mr Moore and slapped a gagging order on him.

What the four were really saying was that the herd instinct had, 
fatally, taken a grip on a banking sector which convinced itself 
credit and property prices would go on growing for ever and the seven-
figure bonuses would keep gushing forth. While the bank bosses are 
the focus of the public's outrage over this catastrophe, they were 
not alone. Boards of directors and institutional shareholders were 
caught up in the frenzy. So were home-buyers who eagerly took on 
irresponsibly high levels of debt in the belief that property prices 
had just one direction of travel. So too were the consumers who made 
the UK the credit card capital of the world, running up a personal 
debt mountain of £1.3 trillion before the bubble burst. And at the 
pinnacle of responsibility sat a government which allowed the growth 
of money to run dangerously out of control while presiding over a 
regulatory regime of its own creation that was to prove hopelessly 
ill-equipped to forestall the crash.

The end result? The banks failed in their paramount duty, the safe 
keeping of their customers' money. This has shattered people's trust 
in them and, until that is restored, the banking sector cannot 
flourish and nor can the wider economy because a strong financial 
sector is vital to this country's economic health - before the crash 
it contributed more than 10 per cent of GDP. Yesterday's Commons 
confessional by these fallen titans was a small step in the right 
direction.

===Treasury committee MPs miss chance to grill bankers in detail 
about their role in crisis
[Clearly written before Paul Moore spoke although timed at 5.39 am 
today!!!]
By Richard Fletcher
[- - - - - - - - - -]

Almost all of the MPs on the Star Chamber that is the Treasury Select 
Committee had tales of outraged constituents who want to see bankers 
hang. So it is understandable that in front of the packed crowd 
gathered yesterday for the bloodsport, the MPs felt the need to 
grandstand.

Yet it is a shame that in the marathon session - three and a half 
hours as opposed to the planned 90 minutes - they did not land any 
lasting punches on the four bankers who were at the heart of 
Britain's banking melt-down.
We have learned very little new information about how exactly the two 
giant lenders, Royal Bank of Scotland and HBOS, collapsed 
spectacularly last October  [- - - - - - - - - -]

There were odd glimpses. Sir Tom McKillop looked to be on sticky 
ground when he admitted RBS's disastrous acquisition of ABN Amro had 
been largely based on due diligence done in May 2007, five months 
before the deal completed and before the economic outlook had 
dramatically worsened. He should have been pressed harder on why RBS 
did not think again about the deal.

The HBOS duo got themselves tied in knots over why Peter Cummings, 
their commercial lending supremo, was allowed to effectively build 
his own empire within the bank which left it with a lethal exposure 
to the property market.

All four bankers, who appeared to have been heavily coached ahead of 
yesterday's appearance, were ready with their fulsome apologies for 
what has happened - though each one was careful not to take personal 
blame.
Given that it is very unlikely that any one of them will ever end up 
in court over the implosion of their banks, this was an important 
opportunity to grill them publicly and in detail about their role in 
the crisis. It was missed.

===THE SUN SAYS - - - - -
FAT CAT SLAP
WELL, we got an apology. Sort of.
The four jokers who destroyed Britain's once-proud banking industry 
fell over each other to say sorry... for other people's mistakes.

Fred "The Shred" Goodwin, of RBS, "could not be more sorry". HBOS's 
Andy Hornby felt "profound and unreserved" regret. There were 
crocodile tears all round.

They even sobbed over the personal fortunes they've lost buying 
shares in their own doomed banks. Poor saps.

But none of it was their fault, of course. The crash was impossible 
to predict. There were "no siren voices".

That's how it stood until Tory MP Andrew Tyrie shot them down in flames.
HBOS was warned early on by its own "risk manager", Paul Moore, that 
the bank was dangerously over-stretched, under-resourced and 
expanding too fast.

Mr Moore was backed by the City's watchdog, the Financial Services 
Authority.   Instead of listening to this highly qualified 
whistleblower, the bank sacked him, gagged him - and replaced him 
with an unqualified successor.
And why not? After all, NONE of the four bank chiefs quizzed by MPs 
have any banking qualifications whatsoever!

Toxic
Nor, they confessed, did they have a clue about the toxic American 
debt now burning a hole in taxpayers' pockets.   They also ignored 
clear warnings, squandered £10bn on a dud Dutch bank - and landed us 
with the bill.
Complacency oozed from these sharp-suited ex-Masters of the Universe.

Gordon Brown and Alistair Darling must be appalled by such reckless
acts in their own political backyard.

They will surely ask why warnings from the HBOS whistleblower were 
ignored? And who was so stupid as to sack him?

The answer, worryingly for us all, is ex-HBOS chief Sir James Crosby.
Today, Sir James is deputy head of the FSA  [WAS- - - see Late News 
in intro ] - the body that supported Paul Moore.
He also happens to be one of the PM's key credit crunch advisers.
Is that why Mr Brown seems so reluctant to ban all further bonus 
payments to those banks supported by taxpayers?
The Prime Minister expresses anger at these bonuses with one breath - 
and fear of legal action with the next.   He should tell these greedy 
bankers to sue and be damned.
Because, with millions now facing years of hard times in the worst 
recession for a century, he'll be damned if he doesn't.