Should failed bank reward their staff with bonuses? ( Archived) (20)

Exactly they should be hung drawn and quartered imo

"After I was dismissed and to prove just how seriously HBOS took risk management, I was replaced by a new group risk director who had never carried out a role as a risk manager of any type before."

He concluded: "Sadly, no one wanted or felt able to speak up for fear of stepping out of line with the rest of the lemmings who were busy organising themselves to run over the edge of the cliff behind the pied piper CEOs and executive teams that were being paid so much to play the tune and take them in that direction."

Two former HBOS executives were quizzed by the Treasury select committee over Mr Moore's dismissal. George Mudie, a Labour committee member, said: "At the end of the day you sacked your group risk fellow. Now, four years later it turns out he was right and you were wrong."

Lord Stevenson, the former chairman of HBOS, replied: "I remember the incident very well. It was taken very seriously by the board."

Last night George Osborne, the shadow chancellor, said: "Paul Moore has made very serious allegations about how his warnings about the risks being run at HBOS were dismissed by the then chief executive, James Crosby.

"Given that as Chancellor, Gordon Brown appointed Sir James as Deputy Chairman of the FSA and that as Prime Minister he relies upon him as a key economic adviser, the Government need urgently to investigate the allegations and discover the truth.

"What is at issue here is Gordon Brown's judgement and the people he takes advice from."

HBOS collapsed because of the failure of the very business model that allowed it to expand rapidly.

The bank operated with a huge £198bn so-called "funding gap" – the difference between customer deposits and customer loans. The gap was filled by borrowing on wholesale international money markets. But from 2007, those markets effectively froze as investors took fright, leaving HBOS unable to raise money and teetering on the brink.

Sir James was unavailable for comment.

But Mr Moore said: "One final observation I would make about the HBOS disaster is this: wasn't it actually Sir James Crosby rather than Andy Hornby (HBOS chief executive) who was the original architect of the HBOS retail strategy?

"Sir James is still deputy chairman of the FSA and advises the Government on how to solve the mortgage crisis. Some might now question what his 'contribution to financial services' has been when this will have led to millions of people in excessive debt, 10,000s who will lose their jobs and many more who balance sheets have been impacted by precipitous fall of the HBOS share price."

Mr Moore has previously accused Halifax bosses, including ex-Asda executive Mr Hornby, of abandoning the bank's conservative roots in a reckless rush for market share.