Downing Street Says » Sir James Crosby

Asked what the Prime Minister’s view was of the situation, the Prime Minister’s Spokesman (PMS) told the assembled press that these were serious allegations, but they were allegations. They were contested by HBOS and they were contested by Sir James Crosby. There was an ongoing Treasury Select Committee inquiry into this area and it was as part of that inquiry that this issue came to light yesterday.

The wider issues of bank governance and the management of risk in banks were being addressed by the Walker Review. The Financial Services Authority (FSA) had informed us that they were fully informed of the investigation into James Crosby at HBOS. Steps were taken to ensure that a full independent inquiry took place and the FSA was satisfied at the time that the risk function at HBOS was properly constituted.

The Treasury had been in contact with the FSA this morning to establish whether there was any further relevant information in this matter and that was where things stood. Asked at what level the Treasury had been in contact with the FSA, the PMS said he would not be getting into exactly who had been talking to who, but obviously there had been contact with the FSA today following these accusations coming to light in the form that they did in the Treasury Select Committee inquiry yesterday.

Asked what the Prime Minister thought should happen now, the PMS said that it would be best if people waited for the Prime Minister to answer some of these questions himself very shortly.

Asked if anyone in the Government had had any contact with Sir James Crosby in the last 24 hours, the PMS said he would not get into the contact we may or may not have had with individuals. Put that the media had struggled to get in contact with James Crosby, the PMS said that these allegations were clearly contested by HBOS on his behalf and he had consistently contested them since they were first made some time ago.

Asked whether the Prime Minister thought that those who sat on the FSA board should also sit on the board of banks at the same time, the PMS replied that James Crosby was appointed as a non-executive director and he wasn’t involved in the regulation of his own bank when he was at the FSA. At the time the FSA were satisfied that the risk function at HBOS was properly constituted.

Asked how well the Prime Minister knew James Crosby, the PMS said that Sir James Crosby was somebody who had performed a number of reviews for the Government, as had many other people. Asked whether he expected Sir James Crosby to still be in a job at the end of the day, the PMS said that these were serious allegations, but they were contested allegations.

Asked whether the Government felt it should have a role in looking into the matter, the PMS replied that there was a full independent inquiry that took place at the time. The Treasury were in contact with the FSA to establish as to whether there was any further information that was relevant to this particular issue and the Treasury Select Committee were taking a very thorough look at a whole set of related issues.

Asked if it would be better for Sir James Crosby to step aside from his role at the FSA in the meantime, the PMS said these were serious allegations as we were acknowledging, but they were contested allegations.

Asked whether it was right for someone to become a regulator after being in charge of a bank that had been brought to its knees, the PMS said that there were many banks around the world that found themselves in a very similar position to that of HBOS. This was not a position that was unique to the UK or unique to the UK banking system. Asked whether there had been an error in judgement in appointing someone to carry out a review into reviving the market of mortgage-backed securities when they had worked for a bank that was heavily exposed to mortgage-backed securities, the PMS said he wouldn’t accept that at all. We would examine and take forward his review on the basis of the substance of that review.

Asked whether the Prime Minister thought that Sir James Crosby had done a good job running HBOS, the PMS said that we were not going to start commenting on the performance of individuals at this point. Asked whether the Prime Minister had full confidence in Sir James Crosby, the PMS replied that these were serious allegations that had been made, but they were contested allegations.

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» Wednesday, February 11, 2009

Sir James Crosby

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