February 12, 2009

Brown clarifies Crosby appointment

British Prime Minister Gordon Brown distanced himself Thursday from the aftermath of allegations that a top bank regulator had fired a cautious risk assessor.

Deputy Chairman of the Financial Services Authority James Crosby resigned Wednesday after former employee of HBOS bank Paul Moore told a Treasury committee that Crosby, then the bank's chief executive officer, fired him as he was advising the bank to proceed with caution.

On Thursday, Brown denied that he had chosen Crosby for the regulator position, saying he had approved of the panel of four that picked Crosby, The Times of London reported.

Brown, speaking before members of the House of Commons Liaison Committee, said no information, of course, was given to the Treasury about the issues raised between the FSA and HBOS. He also stressed Crosby was contesting the allegations, The Times said.

However, Brown, who was chancellor of the Exchequer when Crosby was hired in 2003, said by approving the appointment he took responsibility for what happened.

Committee member John McFall told Brown banks, by definition, were a place to keep money safe and with the financial crisis unfolding that didn't happen.

That's the reason for the anger being generated this week, he said.