HBOS risk boss says lessons of failure have not been learned

Tim Wallace
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A FORMER whistleblower and risk head at failed bank HBOS yesterday warned lessons had not been learned from the crisis.

Paul Moore told peers and MPs that there was a “threatening” culture at the bank, where senior executives ignored his warnings over risk and stability.

“If your job was to check people out, there was behaviour that was threatening and unpleasant to people doing these activities” in risk and compliance, Moore told members of the Parliamentary Commission into Banking Standards.

And he argued there was a conflict of interest in the reporting lines when passing on concerns to his superiors, as executives are responsible for growth and so may not act properly on risk concerns which get in the way of that.

Instead, he called for risk and compliance officers to report up to non-executive directors.

However, he also added that the non-executives at HBOS were not always qualified for such a role.

“My experience of non-executives on risk committees is that they were generally inadequate. As a rule, they did not have technical expertise in risk management, audit, assurance, oversight.”

More broadly, Moore said the whole structure of business in the UK is set up in the wrong way.

“The current way company law is set up drives executives to focus on short-term profits,” he said.

“That is what investment analysts want, and in itself contains risks.”