HBOS Boss with a Conscience

 Posted by on 10 Apr 13  Categories: Business
Apr 102013

MoneySir James Crosby, who was the chief executive at HBOS between 2001 and 2006, has voluntarily

  • asked for his knighthood to be withdrawn
  • given up 30% of his £580K annual pension
  • resigned as a non-executive director of Compass Group

He has done this following a Parliamentary Banking Commission report that described him as the “architect” of the strategy that resulted in the failure of HBOS. According to the report there was a “colossal” management failure at HBOS. The report requested regulators to consider barring Sir James Crosby, Andy Hornby and Lord Stevenson from banking jobs.

On Radio 4’s Today programme the question was asked:

Q. Who is the odd one out Sir James Crosby, Andy Hornby, Lord Stevenson or Terry Wogan? …. A: Terry Wogan because he is the only one with a formal banking qualification !

Sir James Crosby is a qualified actuary, Andy Hornby has an MBA from Harvard & specialised in all the finance courses including financial services. Lord Stevenson reported as saying “I have no formal banking qualifications” in 2009 by The Guardian. I believe the quote is from a Parliamentary enquiry. So the joke is accurate about banking qualifications but possibly a little unfair on Hornby who has, at least, studied financial services.

The more I read about the banking crisis the more it seems that it was a disaster waiting to happen and that the people on the highest salaries at the top of these massive organisations did not have the necessary expertise to see that their business strategy would lead to financial crisis for their banks.

The taxpayer came to the rescue of these organisations because if they had been allowed to fail the impact on UK PLC would have been disastrous. If they had been allowed to fail, as would be allowed in non-banking industries, everybody including the bosses would have lost their jobs. However, everybody at the banks has kept their jobs – which for most bank employees is a good thing – but the bosses who were ultimately responsible are still in senior positions earning enormous salaries. As a tax payer who rescued these organisations I would like to see the senior bankers suffer some sort of penalty for the problems they created for their banks and the wider UK economy.

(Sir) James Crosby has a conscience and after reading the report has made the sacrifices listed above. However, he will still have a pension of just over £400K per annum. It is not going to be difficult to survive on this amount ! So, while I respect James Crosby for doing what he has done it still doesn’t really feel like enough of a punishment.

I hope that James Crosby’s actions increase the pressure on Andy Hornby and Lord Stevenson to make similar voluntary sacrifices.


Author: Chris Atkin

Chris Atkin is a videographer specialising in high quality equine videos which are typically used to sell your horse, promote your stallion or equine business or as a memento of a big competition. Videos can be uploaded to YouTube and adverts can also be produced for broadcast on specialist equine satellite TV channels. Facebook, Twitter, Google+

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