Robert Preston, the BBC’s self appointed PR man for Gordon Brown, has been busy tonight following Sir James Crosby’s dramatic resignation a few minutes before Prime Minister’s Question Time.
He says that John Moore’s revelations that he was sacked because he tried to warn HBOS that their business strategy was overly risky made Crosby ‘look a bit of a nit’………..that has to be the understatement of the year.
In the eyes of the general public it has made Crosby look incompetent, dishonorable, disingenuous, take your pick. It has left us wondering how and why this man got a knighthood, how he came to be appointed to the FSA, how he came to be appointed to be a government advisor on the banking crisis.
So no-one in their right mind would argue that Moore got it wrong in respect of the big issue – though Moore’s critique was not that funding would dry up, but that borrowers would have difficulty repaying (which is an important nuance).
The important nuance here, I’m thinking Robert, is that the reason the wholesale funding market dried up was because the wholesale market thought that borrowers would have difficulty repaying.
Both the Bank of England and the FSA have the statutory responsibility to maintain financial stability. They failed.
The statutory responsibility was conferred on them by the Treasury. It, by implication failed.
Gordon Brown was the Chancellor of the Exchequer whilst much of this mechanism was put in place. He failed.
Robert Preston goes on to say:
“Moore’s dossier of complaints that HBOS and Sir James were taking excessive risks was thoroughly investigated by KPMG, the accountancy firm.”
He doesn’t mention that KPMG were the auditors for HBOS – they may have ‘chinese walls’ in place, but are scarcely likely to bite the hand that feeds them too hard. Why wasn’t an truly independent investigation ordered? HBOS must have paid out a sizable sum in compensation to Mr Moore, he was a very senior employee. I trust shareholders are ruminating on the full extent of their losses as we speak.
Preston should talk to the people behind BBC2′s the money programme – they uncovered a massive mortgage fraud in 2003, involving the HBOS amongst others; they seemed to have a fair idea of what was going to happen even then.
Dr Desmond Fitzgerald, an expert in financial markets who advises financial institutions and regulators, said:
Over the past two years most forecasters, including myself, expected the housing market at best to stabilise and more likely to fall. Instead it’s powered ahead. Now clearly if there is this extra flow from these fraudulent self-certified mortgages, that will push hundreds of millions of extra cash flow into the housing market. So you get this sort of self-feeding frenzy, a real bubble effect.
The Money Programme could see it, the Wholesale market could see it, John Moore could see it. Gordon Brown hired as his advisor the man who couldn’t see it.
Interviewed on Chanel 4 tonight, Moore looked calm and collected, as he quietly said:
“I have further detailed evidence [regarding other banking employees still within the banking system] concerning ‘fitness and properness’.
I like his style, drip feed it day by day, keep piling the pressure on them, the wheels are starting to come off.
Keep talking Mr Moore, come the revolution we will need someone trustworthy and honourable to sort out the banking system.