"A culture of greed, unethical behaviour and indisposition to challenge."

So, Sir James Crosby, (twat above) has resigned as deputy head of the Financial Services Authority, because a nasty whistleblower (Paul Moore) put out a release about Crosby's contribution to creating the credit crunch in his previous post as boss at Halifax Bank of Scoland.

He sacked Mr Moore, who was the then head of risk at HBOS, who had been trying to warn the board that the bank was piling up unacceptable levels of risk. DOH!

The Beeb have the full text on their website, my but it's veh long so, as a favour to my newfound chums here in Mentalist Central

Here's the common sense extracts (the best bits) that those of us without a golden parachute, or a degree in toxic rich front loaded diversionary funding tactics might begin to comprehend...


http://news.bbc.co.uk/1/hi/uk_politics/7882581.stm


2.6 In my view, as an experienced risk and compliance practitioner, the problem in finding the real cause of the banking crisis is being made more complex than it needs to be.

2.7 I believe that we are missing the wood for the trees and that the key solutions to prevent such an event happening again are simpler than we think. In relation to policy changes, I make some short recommendations that the Committee may wish to consider in section 4 below.

2.8 But let's start with the cause and this fairly obvious proposition: even non-bankers with no "credit risk management" expertise, if asked (and I have asked a few myself), would have known that there must have been a very high risk if you lend money to people who have no jobs, no provable income and no assets. If you lend that money to buy an asset which is worth the same or even less than the amount of the loan and secure that loan on the value of that asset purchased and, then, assume that asset will always to rise in value, you must be pretty much close to delusional? You simply don't need to be an economic rocket scientist or mathematical financial risk management specialist to know this. You just need common sense. So why didn't the experts know? Or did they but they carried on anyway because they were paid to do so or too frightened to speak up?



2.22 To mix a few well known similes / metaphors / stories, the current financial crisis is a bit like the story of the Emperor's new clothes. Anyone whose eyes were not blinded by money, power and pride (Hubris) who really looked carefully knew there was something wrong and that economic growth based almost solely on excessive consumer spending based on excessive consumer credit based on massively increasing property prices which were caused by the very same excessively easy credit could only ultimately lead to disaster. But 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 that tune and take them in that direction.

2.23 I am quite sure that many many more people in internal control functions, non-executive positions, auditors, regulators who did realise that the Emperor was naked but knew if they spoke up they would be labelled "trouble makers" and "spoil sports" and would put themselves at personal risk. I am still toxic waste now for having spoken out all those years ago! I would be amazed if there were not many executives who, if they really examined their consciences closely, would not say that they knew this too.


2.24 The real problem and cause of this crisis was that people were just too afraid to speak up and the balance and separation of powers was just far too weighted in favour of the CEO and their executive.



3.3 It follows that there is a natural tension between the need to raise legitimate challenge on the one hand, and the likely reaction of those individuals who are the subject of the challenge. There is also the risk that the individual who raises the challenge will be criticised for the style or tone of the challenge.



2.17 At this point I want to stress in the strongest possible way that I am simply not interested in blame and I don't think it really ever works. I was ultimately fairly compensated by HBOS. What I am very interested in is the future. As I wrote once at to my boss at HBOS itself what we need this crisis to do for us is "to create a watershed here so we can move on from the issues of the past (from which we can learn but not blame) to the brave new world of the future." Although, key people at HBOS did do wrong, I am also sure that their intentions were usually good and, in a sense, they were also caught up themselves in what the Greek tragedies would call the "ineluctability of fate".