FSA vice-chairman resigns on HBOS risk allegations

by Gill Montia

Story link: FSA vice-chairman resigns on HBOS risk allegations

The vice-chairman of the Financial Services Authority (FSA), Sir James Crosby, has resigned.

The former HBOS chief executive was yesterday accused of having dismissed a senior employee of the bank, who had warned that the business was growing too fast.

Sir James has denied the allegation, which emerged during yesterday’s Treasury Select Committee examination of former HBOS heads, Andy Hornby and Lord Stevenson.

Replies to MPs questions about the near-collapse of the bank revealed that Paul Moore, the former head of risk at HBOS, has alleged that he was fired by Sir James Crosby in 2005, when Sir James was at the helm, after warning that the bank’s pace of growth was dangerous.

It is understood that Sir James will be contesting the allegations but has felt it best to end his role at the FSA.

Sir James is also the author of the Crosby report, which was commissioned by the Government in April of last year to suggest ways of restoring confidence in the UK mortgage market and recommend means of increasing mortgage lending.

In addition to ending his role as FSA vice-chairman, Sir James is stepping down as an economic adviser to the Government.