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HBOS executives 'threatened' colleagues who questioned risk-taking HBOS executives 'threatened' colleagues who questioned risk-taking
(about 4 hours later)
HBOS executives threatened and swore at colleagues who were investigating the risks being taken by the banking group before it collapsed during the financial crisis. HBOS executives threatened and swore at colleagues who were investigating the risks being taken by the bank before it collapsed in the financial crisis, it has been claimed.
The claim was made by Paul Moore, the former HBOS head of group regulatory risk who was sacked after raising concerns about the bank's management, during the latest session in front of the parliamentary commission on banking standards committee on Tuesday. Paul Moore, the former HBOS head of group regulatory risk who was sacked after raising concerns about the bank's management, made the claims during the latest session of the parliamentary commission on banking standards.
"When I tried to resolve the previous difficulties with Jo Dawson [HBOS group risk director 2004-2005 who eventually replaced Moore], she leant over the table – she stood up – pointed at me and said 'I'm warning you. Don't you make an effin' enemy out of me.' It demonstrated that if a senior executive thought it was perfectly OK to speak to the head of regulatory risk in that tone you can imagine how the culture spreads through the organisation." "When I tried to resolve the previous difficulties with Jo Dawson [HBOS group risk director 2004-2005 who eventually replaced Moore], she leant over the table – she stood up – pointed at me and said 'I'm warning you. Don't you make an effin' enemy out of me'," he said.
"It didn't matter what you were doing, if your job was to check people out, there was behaviour that was threatening and unpleasant to people doing these [risk assessment] activities," Moore also said, before telling the committee that HBOS was "worse than other environments [he'd] experienced", while "sales targets and bonuses linked to sales targets were right at the heart of this". Moore said the sales culture had been driven by former chief executive Sir James Crosby. "It demonstrated that if a senior executive thought it was perfectly OK to speak to the head of regulatory risk in that tone you can imagine how the culture spreads through the organisation.
The comments by Moore are the latest about how he saw the collapse of the lender, which has made him one of the better-known players in the story of the UK's financial crisis. "It didn't matter what you were doing, if your job was to check people out, there was behaviour that was threatening and unpleasant to people doing these [risk assessment] activities".
In 2009 he told MPs he had been sacked for raising concerns about the lender's rapid growth in the years before the credit crunch; HBOS executives "threatened" colleagues who questioned risk-taking; while he has also submitted detailed reports to the Financial Services Authority on what went wrong at the bank. During Tuesday's appearance, he repeated many of his previous criticisms. Moore also said that HBOS was "worse than other environments [he'd] experienced", that "sales targets and bonuses [driven by former chief executive Sir James Crosby] were right at the heart" of the bank's collapse and that the board appointed Carphone Warehouse founder Charles Dunstone as head of the retail bank's risk control committee when he had "no technical expertise".
The comments are the latest from Moore on how he saw the collapse of the lender. In 2009 he told MPs he had been sacked for raising concerns about the lender's rapid growth in the years before the credit crunch while he has also submitted detailed reports to the Financial Services Authority on what went wrong. During Tuesday's appearance, he repeated many of his previous criticisms.
After his dismissal, a report into Moore's allegations – commissioned from the bank's auditors, KPMG – concluded that he lost his job because of personality clashes inside the lender in 2004 and not that Crosby sacked him because of warnings that HBOS was "going too fast" and "was a serious risk to financial stability and consumer protection".After his dismissal, a report into Moore's allegations – commissioned from the bank's auditors, KPMG – concluded that he lost his job because of personality clashes inside the lender in 2004 and not that Crosby sacked him because of warnings that HBOS was "going too fast" and "was a serious risk to financial stability and consumer protection".
Moore told the committee the accounting firm had concluded exactly what he expected. "The KPMG report said I was a lunatic and they were right – in summary," he said.Moore told the committee the accounting firm had concluded exactly what he expected. "The KPMG report said I was a lunatic and they were right – in summary," he said.
Colin Matthew, the former chief executive of HBOS's international division, and Dawson are scheduled to give evidence later on Tuesday. The committee also heard from Colin Matthew, the former chief executive of HBOS's international division, as well as Dawson.
Members did not ask her about the alleged exchanges with Moore, but she told them of how "one heard" rumours that HBOS's corporate bank – which was largely blamed for the bank's demise – was less cautious than competitors in giving loans, although she said she had "no ability to discern if people were jealous".
Dawson added: "We had an annual management conference every year, the top 500 or so coming. In 2006, I think it would have been, Sir Philip Green came as the guest speaker and … was very positive about [the HBOS corporate bank's] understanding of business."
The evidence came as the FSA prepares to kick off its own investigation into the collapse of HBOS.
In December, the City regulator published its report into the near-collapse of Royal Bank of Scotland, but had been delaying commencing its HBOS investigation until it had completed enforcement action against Peter Cummings, the former head of the bank's corporate division. Cummings was fined £500,000 and given a lifetime ban from the City in September.