Peter Hoskin

Will Brown get hit by the banking shrapnel?

Will Brown get hit by the banking shrapnel?
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So far as Brown is concerned, the biggest problem with this grilling of the bankers is that it will rebound, dangerously, on to him.  Despite the Government's best efforts to pass the buck (see Alistair Darling's article in the Indy today), there's plenty of room for them to be embarrassed by the associations, friendships and working partnerships that the Treasury Select Committee is shining a light on.  The ever-alert Paul Waugh points out one of them over on his blog:

Yet today's news from the Treasury Select Committee is the most damaging threat of all of to Mr Brown and Mr Darling's judgement in relying on Sir James [Crosby, former chief exec of HBOS and a "favourite adviser" to Gordon Brown].

Former head of risk at HBOS Paul Moore alleges (under Parliamentary privilege allowed to the Committee) that Sir James sacked him after he tried to blow the whistle on the fact that the bank was expanding too fast and that its sales culture was overshadowing its risk management.

The TSC today heard that Sir James then personally appointed a new head of risk with no experience in risk management. Mr Moore claims that he was "summarily dismissed" and that Sir James wrote - contrary to HBOS policy - at the time "the decision was mine and mine alone".

Former HBOS chairman Lord Stevenson today said a nine-month probe into Mr Moore's claims concluded there was no truth in the claim that he was sacked for trying to blow the whistle. But his claims are potential dynamite - for both HBOS, Sir James and Gordon Brown.

As Rachel Sylvester says in her excellent Times column this morning, Labour is "caught in the headlights of the City".  Only question is: will they get run over?