In a House of Commons Liaison Committee this morning Treasury Select Committee chairman John McFall MP said: “Does the fact that Crosby was in the FSA not bring into question regulatory management and does it discredit it?”
Brown denied this and replied by assuring Committee chairs that the FSA were having discussions with HBOS and had “similar discussion with 20 to 30 other institutions” at the same time. He said: “No information was given to the us at the Treasury by the FSA regarding the HBOS investigations, as these were actions taken between the regulator and HBOS. I believe the right decisions were taken.
“The FSA committee panel said Crosby was a leading industry practitioner with broad experience both as a fund manager and a banker. He was an outstanding individual with an outstanding intellect.”
Michael Jack MP said: “Are you telling me that one of the UK’s biggest banks has got a shot across the bows while 20 to 30 similar conversations were going on that these matters did not figure in Treasury discussions? In all these discussions did you discuss any real world issues?”
Brown argued that this was “magnified out of all proportion” and said FSA action in reaction to Moore’s accusations were complete.
“Why then did the FSA have to go back in 2006? I can’t believe the tripartite didn’t discuss this together. I don’t know what world these people were operating in.”
Brown argued: “HBOS didn’t fall because of these specific allegations, it fell because its business model was flawed.”