Lords-A-Leaping

Oh! If only...

So lets just get this straight. There will be no investigation, the Police have decided, into allegations that four members of the House of Lords were willing to influence or change laws in return for cash. Why? Because "The application of the criminal law to members of the House of Lords in the circumstances that have arisen here is far from clear".

Smashing. So definitely not one rule for Lords and another for everyone else then.


We've also been treated to the spectacle of the resignation of Sir James Crosby as deputy chairman of the FSA amid very murky circumstances. That'll be the same Sir James who, when he was head of HBOS (you remember - one of the many banks we have bailed out), fired the head of group regulatory risk - Paul Moore.

Now, Mr Moore appears to have just been doing his job as he had raised concerns regarding HBOS exposure to dodgy loans and the ability of the bank to recoup the money tied therein. He maintains he was fired as a result of his 'whistle-blowing' on the instability of the banks business model.

What is interesting is that the FSA investigated his claims at the time and reported that they had no merit. But, it appears from further reading, that Mr Moore's concerns centred around the ability of those sitting with the loans to repay them - not the wholesale drying up of money markets which eventually led to the bank being bailed out. So, in the strictest sense, his concerns were unfounded but, nonetheless, very real and surprisingly accurate although for different reasons.

The FSA do not dispute that they repeatedly warned HBOS about their risk management over a number of years from 2002-2006 which coincides nicely with the time that Sir James was in charge.

So, in the crazy mixed-up world of high finance, what happened next? In stepped good old Gordo, in his capacity as Chancellor, to appoint Sir James as deputy chairman of the FSA. Eureka! We get rid of the guy trying to get HBOS to get a handle on its risky finances and appoint the guy who fired him to be second-in-command of the "independent" body that regulates the banking industry FFS. (I should point out that the Financial Services Authority is funded by the very same firms it regulates and that the Treasury appoints its board - handy, eh? Not to say, very cosy.)

Naturally enough, Gordo, now as PM, denies any knowledge of anything being wrong anywhere ever.