FCA chair Griffith-Jones faces calls to resign over HBOS audit

John-Griffith-Jones-480.jpg
FCA chairman John Griffith-Jones

Financial Conduct Authority chairman John Griffith-Jones is facing calls to resign after he failed to flag up huge losses at HBOS in his role as chairman of accountancy firm KPMG.

KPMG audited HBOS before its collapse and gave the bank a clean bill of health.

Last week, the Parliamentary Commission on Banking Standards published a damning report about HBOS’s management. It revealed the bank was shouldering £47bn of losses when it was audited by KPMG.

According to the Daily Mail, Labour MP and Treasury select committee member John Mann has called for Griffith-Jones to quit. He says: “He should absolutely resign. These grossly failed businessmen should not be in any senior positions in any organisation. Griffith-Jones played along with this Alice in Wonderland economics and the taxpayers are now footing the bill.”

The FCA, which will publish a report on the bank’s collapse, says Griffith-Jones will not be involved. A spokesman says: “John Griffith-Jones was subject to a rigorous appointment process by HM Treasury, and had an appointment hearing with the Treasury select committee.”

KPMG may be investigated by the Financial Reporting Council over its audit of HBOS. The FRC says it will review the commission’s report and the FCA’s conclusions “to see whether there is a case for an investigation under our powers”.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 20 comments at the moment, we would love to hear your opinion too.

  1. He missed a £47b loss as an Auditor and is now Chairman of the FCA after a vigorous vetting process. Who was doing the vetting, other failed Bankers and Regulators? Come back Ronnie Biggs and Robert Maxwell etc, you haev the perfect qualifications to fill this position.

  2. How do these people get their jobs, it would seem that in the city environment the more you screw up the higher up you are placed in future.
    Having such a man heading up the FCA is a mockery and an insult to every hard working IFA whose fees support these incompetent screw ups.

    In a short while I will be leaving the industry I have loved working in for 30 yrs with some sadness as I have seen it reduced from a vibrant contributor to our economy, to an industry led by regulators whose lack of knowledge of what the industry contributes to the economy and how it is vital to our future success and prosperity, is decimating the most important sector (IFA) for the sake of some holy grail belief in their own view of how consumers want to be treated, inevitably leadng to the consumers detriment unless they have lots of money to invest.
    The RDR will destroy the IFA sector and render it an irrelevance in the next two years.

    The lamentable lack of accountability at the regulator for their massive screw ups is only equalled by their continuing attack and determination to force those of who have assisted clients for decades to access affordable and suitable advice and services, out of the industry to be replaced with higher qualidied exam led individuals coming in to the industry who will toe the prescriptive line of how the provision of financial advice should be given, irrespective of the real needs of clients.

    Anyone in our industry who has ever had to deal with a death claim will understand the need for the ordinary consumer to have access to IFA services at a reasonable cost, the reduction in advisers and the phenomenal increase in regulatory costs does not bode well for IFA survival

  3. Cap'n Birdseye 9th April 2013 at 9:08 am

    There is a big ‘club’ from which these financial lightweights are drawn.

    Cloned scavengers whose main aim to to line their own pockets whilst paving the ground for their next hop up the corporate ladder.

    The whole lot of them are bent.

  4. Absolutely right that he should go immediately and without any payoff or pension but I am not sure that will happen. At least we are seeing some severe criticism of some of the people who helped lead the country down this road to economic disaster.

    I hope that particular bandwagon has a long way to run.

  5. Forget the resigning !! he should be sacked and sacked now. I am sick and fed up of this endless merry-go-round that these incompetent failures ride on, regulator to bank to auditor and back again.

  6. You might be expecting amother attack on this man from me….. you will not get one (yet) as I know absoutely NOTHING about him.
    Lopping off the head without checking to see who in the organisation was actually directly responsible first is NOT very sensible.
    Lets not have trial by media please, let look at the facts first and THEN we can decide whetehr to lop off the head as well as a few limbs…… the limbs should go first.
    And, we all make mistakes (Churchill and the Dardinelles comes to mind compared to his handling of WW2)
    Lets see the facts first please. I don’t like shoot fiirst ask questions later unless it is an emergency.

  7. Roman Duzinkewycz 9th April 2013 at 9:22 am

    Heard it all and seen it all before – jobs for the boys and some might even say corrupt to the core – give him a knighthood and move him on with a great big fat pension, new job paying massive salary and everything that goes with it – does anyone see a pattern here? Can’t actually think of a word to describe these people adequately – my consolation is leaving this terrible industry with nothing but bad memories of the regulators and associated individuals – I’m glad to be going.

  8. I’m with Phil Castle on this one.

    KMPG is not some high accountancy practice, where the partners see all the mail. Unless there is evidence that he was personally involved, or condoned these failings, why should he be thrown to the wolves?

  9. Can’t find much to disagree with here. It seems being part of “the club” pays off. It doesn’t matter that you are incompetent. In fact it is an advantage because every time they fail these people get pushed higher up the ladder until they retire to the House of Lords. God help us all!

  10. This is yet further evidence of the unsatisfactory nature of the ‘revolving door’ that exists between the Regulator and the big for accountancy firms. Each one of these firms can easily be accused of being too big for their boots. Each one is defending litigation for either mistakes or dereliction of duty of care. The US and EU are seriously looking at trying to break their audit monopoly and what does our Government and Regulator do – unfailingly recruit from them and those who have spent a few years at Canary Wharf look for a cosy sinecure at one of them in return.

    I have bleated before on this topic. It is high time the rug was pulled. Perhaps this chap was not directly culpable, but if his head on a spike stops the merry go round then it will have had a positive effect.

  11. The greater the incompetence, the better the next job……
    Err, don’t forget to throw in a knighthood too. Arise Sir JGJ

    I never used to believe in the concept of a parallel universe, but I’m beginning to think there must be one.

  12. Doesn’t it just get murkier and murkier.

    Regardless of whether he was directly involved in the Audit or not he was the man at the top and was paid for that responsibility/accountability accordingly.

    There used to be something called honour. I think the last individual who showed it in this country was Stanley Baldwin.

  13. I feel I can legitamately call for Hector Sants to be referred to as “Sir Hector the Undeserved” as I stood up at a conferecne where he was a guest speaker and publicly challenged him over the Longstop and several other issues.
    As I said before, having not challenged Mr Griffiths-Jones and knowing nothing of him, as I live in the UK and British justice (with all it’s flaws), innocent until proven guitly is my approach and will remain so inless I am on holiday in Europe, in which case I am wary of much of the continents reverse system. I am also wary of the US system and it’s abuse of our Anti Terrorism laws to extradite for (alledged and unproven) financial crimes committed in Britian which affect US interests and force plea bargains.

  14. Hey why not start a witch hunt or even as the Hungarians are allegedly doing, lets start rounding up Gypsies and Jews (again…..)http://rt.com/news/hungary-anti-nazi-protest-113/
    If you do NOT know this man, then calling for his sacking or resignation when he may (or may not) be the best person for the job at the FCA is pretty imbecilic.
    IF he is proven to have been complicit or incompitent, than I will be amongst the loudest to call for his head, but NOT until then.

  15. re Phil Castle and anonymous @ 9.34

    If he cannot be held responsible for the actions of underlings, why was he at KMPG at all ? What were his rems of reference ? Simply being there and taking a salary while huge shortcomings are evolving cannot be acceptable. However, one might ask on what grounds was this man selected subsequently and appointed as Chairman of the new FCA. Rum isn’t it

  16. You couldnt make this up.

    To be fair I dont think he would have personally audited HBOS but I am sure that he must have had some knowledge of the issues.

    This just shows that once you get to the top you get paid for the responsibility but never suffer the consequences of that responsibility.

  17. There was a reported £47b loss that was not picked up. He may not have directly involved in any cover up. How could it be anything else than a cover up? it is not exactly petty cash! If he could not regulate his own firm then how can he regulate the whole industry? The chairman of the FSA has to whiter than white as he is overseeing the standards for everyone else. He may be innocent until guilty but he has to answer these questions. If he cannot answer them convincingly, or avoids answering them, then he must resign.
    Who vetted his application, was the same people who vetted Jimmy Saville’s knighthood?

  18. wesley Haslett 9th April 2013 at 2:54 pm

    The FCA are always banging on to us about due diligence
    Need I say more

  19. In answer to Anonymous | 9 Apr 2013 2:54 pm Whilst the FSA were always banging on to us about due diligence and I am sure the FCA will to. Due diligence I woudl take it on their part would be that they can evidence that they look at this issue and concluded that Mr G-J was not at fault and have kept this decision on file. If not, then whoever failed in that Due Diligence is at fault and their heads should be on the block potentially along with Mr G-J, but ONLY if he is found to be at fault……
    Need I say more?

  20. Mr. Castle, it turns out that you do need to say a little more.

    Can you explain how anything will change if nothing is done? Can you explain how the public can be confident that the FCA will look into this matter appropriately? Can you explain the circumstances where the senior manager of KPMG can be held to be not responsible for the firms failings?

    This one is easy. Let those who failed in their jobs pay a price for once. Im sick of rewarding abject failure with public money. Enough of the cronyism.

    There is always some apologist calling for calm heads and reason while delaying righteous public indignation. Its not always clear what their motives are. There will have been plenty of bank staff who did nothing wrong who have already lost their jobs. If this gentleman had ensured that his audit firm did its job correctly then we wouldnt be debating this now.

Leave a comment