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Tripartite role is criticised

MPs have questioned the tripartite authorities’ relationship after the Prime Minister claimed he had no idea the FSA had found failings in HBOS when considering James Crosby as the regulator’s deputy chairman.

At the bi-annual House of Commons liaison committee meeting last week, Gordon Brown was grilled over his involvement in the appointment of Crosby at the FSA.

The former HBOS chief executive stepped down from the FSA last week after it was alleged at a Treasury select committee meeting that he sacked a risk manager who warned of HBOS’s over-reliance on wholesale funding in 2004.

Brown assured committee chairs that the FSA dealt with HBOS correctly and had “similar discussions 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. I believe the right decisions were taken.”

Conservative MP Michael Jack said: “Are you telling me that one of the UK’s biggest banks 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?”

“Why then did the FSA have to go back in 2006? I cannot believe the tripartite did not discuss this together. I do not know what world these people were operating in.”

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