Brown: HSBOS whole business model was wrong

BlondeHeadOn

Gordon Brown defends James Crosby appointment ... see here:

http://news.bbc.co.uk/1/hi/uk_politics/7884877.stm


Gordon Brown has defended his choice of ex-HBOS chief Sir James Crosby to be deputy head of City regulator FSA in 2003, as he is grilled by senior MPs.
The prime minister's twice-yearly session facing the chairmen of all the Commons committees started at 1000 GMT.
It comes the day after Sir James resigned as deputy chairman of the FSA.
Mr Brown said he appointed Sir James on an independent panel's recommendation and said he had not known at the time the FSA had any concerns about HBOS.
Sir James Crosby resigned as deputy chairman of the FSA - the Financial Services Authority - after claims from HBOS's former head of risk that he had been axed by him after warning that the bank was growing too fast.
Mr Brown insisted whistleblower Paul Moore's allegations had been investigated by the FSA and found to be unfounded. He added that the problems alleged by Mr Moore were not the reason HBOS fell: "It was because its whole business model was wrong."

Generali

Seems a bit dumb to ask someone whose entire business model was wrong to head up the regulator of the entire industry. I'd want to pick someone whose entire business model was right!

Cannon_Fodder

"Mr Brown insisted whistleblower Paul Moore's allegations had been investigated by the FSA"

In the same way the FSA looked after Northern Rock, etc ?

Wookster

Crash should really take his feet out of his mouth and use them for walking.

Cannon_Fodder

"Watchdog's early warning for HBOS"

http://newsvote.bbc.co.uk/1/hi/business/7885059.stm


" The Financial Services Authority (FSA), the City watchdog, has said it raised concerns about the way HBOS was being run as far back as 2002."
"It said it looked at the risks before and after a sacked HBOS risk manager warned about the bank's business model.

• In June 2006, the FSA wrote to HBOS with a further risk assessment, making it clear there were still control issues and the "growth strategy of the group posed risks to the whole group and that these risks needed to be managed and mitigated"
• It also said it backed the findings of an inquiry conducted at the time Mr Moore made the allegations, which found his concerns were unfounded."



These two bullets points look contradictory - the FSA found their own concerns but did not match them with the sacked guy's...?

So maybe the sacking was unrelated/vague, but that should not absolve the FSA from putting HBOS under notice to get their act together - what teeth do the FSA have in these instances?

bubblesmoney

probably the regulators were currying favours with the private sector hoping to bankroll their next big paying pvt sector job by currying favour and burying concerns and actively rubbishing valid complaints, quid pro quo.

just like happened with the madoff case where repeated concerns were raised but no one did anything. was it because they were getting backhanders to look the other way or were they currying favour for their next high paying private sector job. bet its both.

the mafia in their heydays had their men in power structures to do their bidding. in what way is this willful neglect of adequate regulatory supervison any different from what the mafia plants used to do in earlier days. all that is different is the men in thousand dollar suits have got slicker at screwing the tax payer by dancing with the regulators who are only too happy to oblige.

there needs to be stiff jail terms for financial crimes of this magnitude both for the scum bags that manipulated the system and the negligent regulators. nick a mars bar and you get a conviction, scam off millions and billions you get a knighthood and become big shot regulators aka fred the shred goodwin and his HBOS /FSA buddy. wont be surprised if brown gives a knighthood for the wilsons and makes them ministers

parcival

They are all in it together. None of them will ever admit they made a mistake they just want to defend themselves with pathetic excuses. Even the 'sorry' we heard from those clowns the other day was not sincere. What they are really sorry about is that they got found out.

Conrad

I've had a couple of FSA audits.

It really was like some other wordly farce commedy sketch.

They wanted to see my disaster recovery plan to mitigate against the effects of bird flu or other pandemics, flooding, fire etc.
They expected a large dosier of procedures and that it be regularly updated and tested.

This was in case I had bird flu and clients needed an upadate as to when thier survey would be carried out for example.

Being the way I am, I asked thier opinion of Northern Rock and its 125% mortgages in 2006. I got a bemused disinterested quizzical look.
I pointed out that on housepricescrash.co.uk they had been discussing something called a credit crunch since 04/05 - again the same shrug of shoulders.

I pointed out thier regulation bore similarities to child care regulation and I actually specifically said there would be another Victoria Klumbae soon. The point I was trying to make was thier 'tick box' regulation doesn't address the real coal face just as soclial services despite umpteen times telling us they will put in place procedures to ensure 'this will never happen again' it always does.

This tick box mechanical regulation is what has allowed this mess.
This focus on one man band brokers bird flu recovery plans, rather than getting stuck into why N Rock allower 125% mortgages.

bubblesmoney

Conrad wrote: »

I've had a couple of FSA audits.

It really was like some other wordly farce commedy sketch.

They wanted to see my disaster recovery plan to mitigate against the effects of bird flu or other pandemics, flooding, fire etc.
They expected a large dosier of procedures and that it be regularly updated and tested.

This was in case I had bird flu and clients needed an upadate as to when thier survey would be carried out for example.

Being the way I am, I asked thier opinion of Northern Rock and its 125% mortgages in 2006. I got a bemused disinterested quizzical look.
I pointed out that on housepricescrash.co.uk they had been discussing something called a credit crunch since 04/05 - again the same shrug of shoulders.

I pointed out thier regulation bore similarities to child care regulation and I actually specifically said there would be another Victoria Klumbae soon. The point I was trying to make was thier 'tick box' regulation doesn't address the real coal face just as soclial services despite umpteen times telling us they will put in place procedures to ensure 'this will never happen again' it always does.

This tick box mechanical regulation is what has allowed this mess.
This focus on one man band brokers bird flu recovery plans, rather than getting stuck into why N Rock allower 125% mortgages.

this is the kind of thing that happens when you hire more f*ckwits as managers than the numbers of people who actually know what they are talking about. then these managers need to find something to justify their existence and you get these tick box exercises to fill and the rest suffer. same problem in the nhs. bet some highly paid consultancy firm made a killing recommending such bullsh1t tickbox exercises to every govt dept.