Withering evidence to the Treasury select committee - from Paul Moore, former head of group regulatory risk at HBOS - was published just now on this site.

I should point out that Moore was dismissed several years ago and sued the company for unfair dismissal under the whistle-blowing legislation. The claim was settled in 2005.

Here are the choice extracts:

“I certainly knew that the bank was going too fast (and told them), had a cultural indisposition to challenge (and told them) and was a serious risk to financial stability.

“I told the board they ought to slow down but was prevented from having this properly minuted by the CFO. I told them that their sales culture was significantly out of balance with their systems and controls.

“There must have been a very high risk if you lend money to people who have no jobs, no provable income and no assets. If you lend that money to buy an asset which is worth the same or even less than the amount of the loan …and assume that asset will always rise in value, you must be pretty much close to delusional?”

“I strongly believe that the real underlying cause of all the problems was simply this - a total failure of all key aspects of governance.”

Moore also asks why Charles Dunstone - a personal friend of Hornby - was appointed to be the chairman of the retail (Halifax) risk control committee.

Interestingly, he also queries whether Sir James Crosby should be quizzed by the committee, given that he used to run HBOS. Crosby is deputy chair of the FSA and recently advised the government on how to re-start mortgage securitisation.

Crosby has not responded to this so far today.

February 10, 2009 1:22pm in Banks, UK politics | Comment