Wow. There goes Sir James Crosby, who has just announced he is resigning as deputy chairman of the Financial Service Authority.
This is a big blow for Gordon Brown who rates Sir James so highly that he put him in charge of giving the government advice on how to get the mortgage market moving again.
The news has caught the Westminster village on the hop and will dominate the rest of the day and Prime Ministers Questions in a few minutes time.
This really is the revenge of the whistleblower. Sir James was accused yesterday by Paul Moore, the former head of risk at HBOS, of presiding over a culture of risk taking when he was at HBOS that ignored his warnings about the bank being overexposed.
Mr Moore, who had formal responsibility for HBOS policy and its compliance with FSA regulations, gave the Treasury committee a devastating insider's account of how the bank ignored his warnings of financial meltdown. To be in the bank as profits went through the roof was like being caught in the fable of the emperor's new clothes, he said in a memo of evidence.
"Anyone whose eyes were not blinded by money, power and pride" could see that economic growth was based solely on excessive consumer credit based on massively increased property prices, caused by that excessive credit, said Mr Moore.
For repeatedly challenging and trying to rein in HBOS's risk, Mr Moore claimed he was dismissed on the instruction of Sir James Crosby, then chief executive. He sued the company for unfair dismissal under whisteblowing legislation and was compensated but subject to a gagging order which he has now broken.
Sir James left HBOS soon afterwards to become deputy chairman of the FSA - which monitors risk lending by banks. His accusations go right to the heart of how the banks went from boom to bust and send the blame for deregulation bouncing of the door of 10 Downing Street. Enough for now, off to PMQs.
Wednesday, 11 February 2009
Tuesday, 10 February 2009
Bankers - what do they know?
We're all caught up in writing acres of coverage so just time for one quick reflection on the "show trial" of bankers in front of the Commons Treasury committee.
I remember when the Royal Bank of Scotland announced that they had bought the Dutch bank ABN Amro in 2007 and thinking, I suppose like everyone else, along the lines of : "Why have RBS bought a bank with a recession just around the corner? Do they know something about the gathering storm that we don't?"
Now we know from the evidence of Sir Fred Goodwin and his High Chaperal chairman Sir Tom McKillop that the £10 billion deal was a "mistake", "a big mistake", and "a bad decision" in their words. That's cleared that up - they don't know any better than us.
I remember when the Royal Bank of Scotland announced that they had bought the Dutch bank ABN Amro in 2007 and thinking, I suppose like everyone else, along the lines of : "Why have RBS bought a bank with a recession just around the corner? Do they know something about the gathering storm that we don't?"
Now we know from the evidence of Sir Fred Goodwin and his High Chaperal chairman Sir Tom McKillop that the £10 billion deal was a "mistake", "a big mistake", and "a bad decision" in their words. That's cleared that up - they don't know any better than us.
Thursday, 5 February 2009
Blair meets Obama while Brown looks on.
Only the honking horns of a protest by London taxi drivers in Whitehall could have drowned out the noise of furniture, telephones, and possibily the office cat, being thrown across the front rooms of 10 Downing Street when the television started broadcasting live pictures of Tony Blair meeting President Barack Obama.
In power Mr Blair seemed to take effortless delight in upsetting his neighbour and chancellor but even out of office he does not appear to have let the habit of a political lifetime slip.
Getting the presidential handshake ahead of Mr Brown at a Prayer Breakfast with Mr Obama Mr Blair looked as if he was loving every minute of it. He smiled as broadly as the current occupant of 10 Downing Street must have glowered to see the tableau of his former rival bathing the glow of the Obama presidency.
While Mr Brown has to wait until later this month or even until he hosts the G20 in London in April to formally meet President Obama Mr Blair beat him to the photo-op. He beamed from the pulpit, referred to the President as his “very good friend” and went on to prove that, as head of Tony Blair Faith Foundation, he does do God.
The former PM eulogised his way through a deeply religious address, studded with references to his own faith combined with a series of self-depricating gags. He spoke about his own spiritual awakening at the age of ten, after his father had a stroke, and concluded with the hope that politicians would "do God’s will".
Mr Obama was quick to praise the ex Prime Minister, claiming he was “an example to so many people around the world of what dedicated leadership can accomplish”. Ouch, how that must have hurt in Downing Street.
In power Mr Blair seemed to take effortless delight in upsetting his neighbour and chancellor but even out of office he does not appear to have let the habit of a political lifetime slip.
Getting the presidential handshake ahead of Mr Brown at a Prayer Breakfast with Mr Obama Mr Blair looked as if he was loving every minute of it. He smiled as broadly as the current occupant of 10 Downing Street must have glowered to see the tableau of his former rival bathing the glow of the Obama presidency.
While Mr Brown has to wait until later this month or even until he hosts the G20 in London in April to formally meet President Obama Mr Blair beat him to the photo-op. He beamed from the pulpit, referred to the President as his “very good friend” and went on to prove that, as head of Tony Blair Faith Foundation, he does do God.
The former PM eulogised his way through a deeply religious address, studded with references to his own faith combined with a series of self-depricating gags. He spoke about his own spiritual awakening at the age of ten, after his father had a stroke, and concluded with the hope that politicians would "do God’s will".
Mr Obama was quick to praise the ex Prime Minister, claiming he was “an example to so many people around the world of what dedicated leadership can accomplish”. Ouch, how that must have hurt in Downing Street.
MPs quiz Robert Peston.
Robert Peston, BBC Business Editor, appeared before the Commons Treasury committee yesterday. I went along to observe.
In these dark days one of my relatives lives by a golden rule: "There was nothing wrong with the economy until that Robert Peston started reporting on it."
The same shoot the messenger sentiment seemed to pervade members of the Commons Treasury select committee when they hauled the BBC business editor and four of his media colleagues before them yesterday.
The great Pesto, like a some Victorian music hall magician, has been accused - variously - of being the man who brought low Northern Rock, damaged the share price of HBOS and Lloyds, and is capable of moving financial markets with a 90 second television bite or a hastily typed blog entry.
Just how responsible is the media for the economic mess we're in and do the newspapers and television, by going on about how bad things are, affect confidence and the very chances of economic recovery? Or, in the words of committee chairman John McFall: "Why is the graph behind the BBC newsreader always pointing down?"
The Treasury committee has done a good job of shredding the reputations of bankers, financiers and regulators so far in this economic crash. Now they thought it ought to be the turn of journalists who report the disaster to take the rap.
For someone credited with so much power Pesto squirmed uncomfortably whenever his prowess was alluded to by his inquisitors. Did he have a secret pass to the Treasury, how did he feel about being a "market force in his own right"? Lib Dem Colin Breed cut to the chase: "Were you responsible for a run on Northern Rock?" he asked.
"I've given a lot of thought to this and the answer is no," said the great Pesto. It was a case of too many savers, too few branches and a crashing website. Oh, images of queues outside Northern Rock did not help but people did the sensible thing to take their money out.
If it was a firing squad then the bullets were going astray. The trouble with journalists in a shooting gallery is that they are as opinionated as politicians, and a lot more articulate. One of the MPs changed tack and asked if the media had not actually caused this mess should they not have seen it coming?
"When the policemen and all the monitors have failed everyone blames the press for not helping them out. It just doesn't wash I'm don't think." said Simon Jenkins, the Guardian columnist. "There are plenty of journalists who were saying something's going wrong here. You happen to have all five journalists who predicted the credit crunch here."
Couldn't they then help by putting good news on the front page for a change, hurrumphed another MP? "Putting happy talk on the front page does not make commercial sense," said Lionel Barber of the Financial Times. "There's no way of hiding that this country is going to have a very tough year at least. The economy is in recession, we've just come off a huge credit boom where everyone thought they could get wealthy on the back of house prices. Now we have correction and it's going to be painful." That was the news, no denying it.
In these dark days one of my relatives lives by a golden rule: "There was nothing wrong with the economy until that Robert Peston started reporting on it."
The same shoot the messenger sentiment seemed to pervade members of the Commons Treasury select committee when they hauled the BBC business editor and four of his media colleagues before them yesterday.
The great Pesto, like a some Victorian music hall magician, has been accused - variously - of being the man who brought low Northern Rock, damaged the share price of HBOS and Lloyds, and is capable of moving financial markets with a 90 second television bite or a hastily typed blog entry.
Just how responsible is the media for the economic mess we're in and do the newspapers and television, by going on about how bad things are, affect confidence and the very chances of economic recovery? Or, in the words of committee chairman John McFall: "Why is the graph behind the BBC newsreader always pointing down?"
The Treasury committee has done a good job of shredding the reputations of bankers, financiers and regulators so far in this economic crash. Now they thought it ought to be the turn of journalists who report the disaster to take the rap.
For someone credited with so much power Pesto squirmed uncomfortably whenever his prowess was alluded to by his inquisitors. Did he have a secret pass to the Treasury, how did he feel about being a "market force in his own right"? Lib Dem Colin Breed cut to the chase: "Were you responsible for a run on Northern Rock?" he asked.
"I've given a lot of thought to this and the answer is no," said the great Pesto. It was a case of too many savers, too few branches and a crashing website. Oh, images of queues outside Northern Rock did not help but people did the sensible thing to take their money out.
If it was a firing squad then the bullets were going astray. The trouble with journalists in a shooting gallery is that they are as opinionated as politicians, and a lot more articulate. One of the MPs changed tack and asked if the media had not actually caused this mess should they not have seen it coming?
"When the policemen and all the monitors have failed everyone blames the press for not helping them out. It just doesn't wash I'm don't think." said Simon Jenkins, the Guardian columnist. "There are plenty of journalists who were saying something's going wrong here. You happen to have all five journalists who predicted the credit crunch here."
Couldn't they then help by putting good news on the front page for a change, hurrumphed another MP? "Putting happy talk on the front page does not make commercial sense," said Lionel Barber of the Financial Times. "There's no way of hiding that this country is going to have a very tough year at least. The economy is in recession, we've just come off a huge credit boom where everyone thought they could get wealthy on the back of house prices. Now we have correction and it's going to be painful." That was the news, no denying it.
Monday, 2 February 2009
Let it snow
There was no real need for weather reports in London this morning. It was snowing as if you’d woken in Helsinki and any further information could be gleaned just by eavesdropping on the mobile phone conversations of the thousands of commuters forced onto slushy pavements by a six-inch overnight fall.
“I’m telling you, there’s no buses, no tubes, no taxis,” said a woman, obviously late for work, outside the closed doors of Whitechapel Underground station. “We’ve got no dry goods, no frozen goods, no deliveries, it’s madness,” squeaked another, explaining the situation down the line to a co-worker or a customer.
It was a kind of madness but the blissful, car-free, snowflakes on the tracks kind of craziness that descends on the city with heavy snow. In north Britain people scoff when the weather in the south east becomes a news story but when snow strikes London it really does mess things up for the commuting world.
The airports were shut, the M25 threw an impregnable, white moat of clogged cars around the metropolis. Black cabs handle white stuff worse than old VW Beetles so they were few and far between, London’s buses carry six million passengers a day - like moving the Scottish population to Carlise and back before 5pm - and there were no buses. The tube system, the veins and arteries of the city, ran sporadically with ten of the eleven coloured lines disrupted to some extent. Eurostar was disrupted by staff shortages - the continent was cut off.
Most sensible people were persuaded to stay at home. City brokers who cancelled their half-term ski break in Zermatt in the face of economic uncertainty played joyously with their children in the parks. Those who made it to work compared outdoor gear and fretted about getting back out of the city as the snow just kept falling.
Londoners do bizarre hats well at the best of times but this morning the fashion focus was on footwear. There was severe competition among the ladies for the most outlandish colour of wellingtons - lilac flower prints being the clear leader in the fashion stakes by 9am. Teenagers sported the traditional solution to inclement weather - Dunlop greenflash sandshoes - but then teenagers listen to a completely different weather forecast judging by their choice of everyday clothing.
Around the Bank of England, where amazingly the lights were still on, there was a better class of wellington on display. Two people passed in the opposite directions wearing green Hunters but I suspect they were pressed into service by the Bank just to show that standards are being maintaining.
One woman strode confidently through the pavement drifts with neat, custom-made crampons attached her black leather boots. She looked smug and possibly Swiss. Imagine - foreigners coming over here and taking advantage of our snow.
To the relief of the criminal fraternity, and possibly some bank directors, the City of London magistrate’s court was closed - no beak on the bench - and across the road the suit shop, with its 80% sale signs, didn’t look as it would be open for long.
The gothic grandeur of Whitehall lends itself well to picture postcard snowscapes and, as widely suspected, there were no green shoots on display. In Parliament Square Brian Haw, the war protester, made himself a martyr to the weather while several backbench snowmen were being built by Chinese camera crews here to cover the visit of their premier.
Big Ben’s bong seemed dulled by the airborne flakes. In the shadow of the Churchill statue a street sculptor, who is usually found playing in the sand on the South Bank of the Thames, carved Jimmy Hendrix on a sofa out of the pack ice he had collected. He did it for no particular reason, just to have fun in the snow. The parliamentary authorities suspended voting for the day so the centre of the political universe was blanketed to a halt. Does that mean I can go home now?
“I’m telling you, there’s no buses, no tubes, no taxis,” said a woman, obviously late for work, outside the closed doors of Whitechapel Underground station. “We’ve got no dry goods, no frozen goods, no deliveries, it’s madness,” squeaked another, explaining the situation down the line to a co-worker or a customer.
It was a kind of madness but the blissful, car-free, snowflakes on the tracks kind of craziness that descends on the city with heavy snow. In north Britain people scoff when the weather in the south east becomes a news story but when snow strikes London it really does mess things up for the commuting world.
The airports were shut, the M25 threw an impregnable, white moat of clogged cars around the metropolis. Black cabs handle white stuff worse than old VW Beetles so they were few and far between, London’s buses carry six million passengers a day - like moving the Scottish population to Carlise and back before 5pm - and there were no buses. The tube system, the veins and arteries of the city, ran sporadically with ten of the eleven coloured lines disrupted to some extent. Eurostar was disrupted by staff shortages - the continent was cut off.
Most sensible people were persuaded to stay at home. City brokers who cancelled their half-term ski break in Zermatt in the face of economic uncertainty played joyously with their children in the parks. Those who made it to work compared outdoor gear and fretted about getting back out of the city as the snow just kept falling.
Londoners do bizarre hats well at the best of times but this morning the fashion focus was on footwear. There was severe competition among the ladies for the most outlandish colour of wellingtons - lilac flower prints being the clear leader in the fashion stakes by 9am. Teenagers sported the traditional solution to inclement weather - Dunlop greenflash sandshoes - but then teenagers listen to a completely different weather forecast judging by their choice of everyday clothing.
Around the Bank of England, where amazingly the lights were still on, there was a better class of wellington on display. Two people passed in the opposite directions wearing green Hunters but I suspect they were pressed into service by the Bank just to show that standards are being maintaining.
One woman strode confidently through the pavement drifts with neat, custom-made crampons attached her black leather boots. She looked smug and possibly Swiss. Imagine - foreigners coming over here and taking advantage of our snow.
To the relief of the criminal fraternity, and possibly some bank directors, the City of London magistrate’s court was closed - no beak on the bench - and across the road the suit shop, with its 80% sale signs, didn’t look as it would be open for long.
The gothic grandeur of Whitehall lends itself well to picture postcard snowscapes and, as widely suspected, there were no green shoots on display. In Parliament Square Brian Haw, the war protester, made himself a martyr to the weather while several backbench snowmen were being built by Chinese camera crews here to cover the visit of their premier.
Big Ben’s bong seemed dulled by the airborne flakes. In the shadow of the Churchill statue a street sculptor, who is usually found playing in the sand on the South Bank of the Thames, carved Jimmy Hendrix on a sofa out of the pack ice he had collected. He did it for no particular reason, just to have fun in the snow. The parliamentary authorities suspended voting for the day so the centre of the political universe was blanketed to a halt. Does that mean I can go home now?
And now the weather...
I know people complain when the weather in the South East of England becomes a news story but believe me outside my window this morning it looks like Aviemore in March.
It started snowing in London yesterday evening and within hours there were broken-down buses, car shunts and general chaos. It hasn't stopped snowing since and there's a good five inches on the rooftops and pavements this morning.
Few buses on the roads (they carry six million commuters a day), no flights into Stansted or London City, tube disrupted. I think I'll try to walk in to Westminster, but first an early morning radio debate and some porridge.
It started snowing in London yesterday evening and within hours there were broken-down buses, car shunts and general chaos. It hasn't stopped snowing since and there's a good five inches on the rooftops and pavements this morning.
Few buses on the roads (they carry six million commuters a day), no flights into Stansted or London City, tube disrupted. I think I'll try to walk in to Westminster, but first an early morning radio debate and some porridge.
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