Sir James Robert Crosby (born 14 March 1956 in Leeds) was Deputy Chairman of the Financial Services Authority from January 2004 until he resigned on 11 February 2009. He had previously been the chief executive of Halifax Bank until its merger with Bank of Scotland to form HBOS, of which he was Chief Executive until 2006.[1]
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James Crosby was educated at the Lancaster Royal Grammar School between 1967 and 1974. After leaving the school, he continued his studies in mathematics at Brasenose College, Oxford.[2]
Crosby joined financial services company Scottish Amicable (acquired in 1997 by Prudential plc) in 1976 and then joined J Rothschild Assurance in 1977. After qualifying as a Fellow of the Faculty of Actuaries in 1980, he was part of the management team which founded wealth management firm St. James's Place plc in 1991, from floating out a majority of J Rothschild Assurance.[3]
Crosby joined the Halifax bank in 1994 as Managing Director of Halifax Life.[4] Five years later, he became the chief executive of Halifax plc, and in 2001 Crosby became the first chief executive of the newly formed HBOS Group after overseeing the merger between Halifax plc and the Bank of Scotland.[5] In early 2006 Crosby resigned after seven years as chief executive[6] leaving HBOS as the fourth largest bank in the United Kingdom in terms of market capitalisation. His position was taken by "his young protégé" Andy Hornby in July 2006.[7][8]
In January 2004 Crosby was appointed by HM Treasury as a non-Executive Director of the Financial Services Authority.[9] In November 2007 he became Deputy Chair of the FSA,[10] and in February 2009 he resigned this role.
During a session of the Treasury Select Committee of the House of Commons on 10 February 2009, it was alleged that Sir James had ignored warnings by its former head of Group Regulatory Risk, Paul Moore, relating to risky business practices. Moore had predicted that HBOS's rapid growth left it vulnerable to a large number of borrower defaults. In 2005 the whistleblower Moore was sacked by Crosby, with Moore quoted as saying that Crosby wrote "The decision (to sack Moore) was mine and mine alone."[11] He relates the key issues in his statement:
On 11 February 2009 Crosby resigned from his post at the Financial Services Authority, which BBC News Business Editor Robert Peston says he understood was to protect the FSA from controversy.[1] However, he still currently retains his job at the Treasury, although the British Prime Minister told the House of Commons at Prime Minister's Questions on 11 February 2009 that this is not the case. The FSA released a statement late on 11 February 2009 that it had concerns about HBOS before the Moore resignation, a statement which raises yet more questions about the regulation of HBOS. A central problem concerns conflict of interests between board members of the FSA and the companies it is trying to regulate. However, Moore has received support from a former member of his team at HBOS, Anthony Smith, who on 17 February 2009, accused HBOS of "dumbing down".[12] Crosby was further criticised when, following the takeover of HBOS by Lloyds, HBOS was responsible for annual losses of £10 billion, in part due to write-downs made because Lloyds' accounting standards are much more conservative than those of HBOS.[13][14] Conservative Shadow Chancellor George Osborne said that the government's bank bailout money had been wiped out by the HBOS losses, saying that "HBOS bankers like James Crosby bear a heavy responsibility".[15][16]
On 11 July 2006, Crosby was appointed by the then Chancellor of the Exchequer, Gordon Brown, to lead the Government's Public Private Forum on Identity Management, a scheme designed to counter problems such as identity fraud.[17] Also in 2006, Crosby received a knighthood for services to the financial industry.[18]
In April 2008, Crosby was appointed by Chancellor Alastair Darling to head up a Working Group of mortgage industry experts to advise the Government on how to improve the functioning of the mortgage market.
Crosby is a non-executive director of television company ITV, and a trustee of charity Cancer Research UK.[19]
In January 2009, it was reported that James Crosby will become the Chairman of Misys.[20]