UK BANKING ROW: Crosby resigns from FSA

by mudricky | February 11, 2009 at 09:13 am

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Sir James Crosby, the deputy chairman of City watchdog, the Financial Services Authority (FSA) has resigned.

This is the man who sacked senior manager Paul Moore after raising concerns the bank was exposed to too much risk when Crosby was in charge of HBOS in 2001 to 2006.

Sir James said in his statement that HBOS had "extensively investigated" Mr Moore's allegations, concluding that they "had no merit". Mr Moore was the former head of risk at HBOS.

"I nonetheless feel that the right course of action for the FSA is for me to resign from the FSA board, which I do with immediate effect," Sir James added.

The FSA said: "[The] specific allegations made by Paul Moore in December 2004 regarding the regulatory risk function at HBOS were fully investigated by KPMG, which concluded that the changes made by HBOS were appropriate."

Moore, in reaction to Sir James' resignation said:

"I read with interest that Sir James continues to refute the allegations I made in my evidence to the Treasury Select Committee and I want all those interested to know that I continue to stand firmly and confidently behind what I have said."

Gordon Brown said today that Sir James Crosby was "right" to stand down as deputy chairman of the City regulator following allegations that he sacked a "whistleblower" who warned of the risks facing HBOS.

Speaking at Prime Minister's Questions, Mr Brown told MPs that the claims made against Sir James, relating to the period when he was HBOS chief executive, would be contested.

"It is right that we investigate serious allegations that are made about the banking system. These are serious but contested allegations."

Sir James Crosby has resigned as deputy chairman of City watchdog, the Financial Services Authority (FSA).

The move follows allegations that, when head of HBOS, he sacked senior manager Paul Moore after raising concerns the bank was exposed to too much risk

Sir James, who led HBOS from 2001 to 2006, said there was "no substance to the allegations".

But Paul Moore said he stood "firmly and confidently" behind his allegations against Sir James.