James Crosby (banker)
James Robert Crosby | |
|---|---|
| Born | March 14, 1956 Leeds, England |
| Occupation | Banking professional |
| Years active | 1977–2009 |
| Known for | CEO of Halifax Bank and HBOS; Deputy Chairman of the Financial Services Authority |
James Robert Crosby (born 14 March 1956) is a British banking professional. He held the position of Deputy Chairman at the Financial Services Authority from January 2004 until his departure in February 2006. Prior to this role, he was the chief executive officer of Halifax Bank before its merger with Bank of Scotland, which resulted in the creation of HBOS. Crosby served as HBOS's Chief Executive until 2006. On 3 December 2012, he gave evidence before the United Kingdom’s Parliamentary Commission on Banking Standards.
Crosby was awarded a knighthood in 2006 in recognition of his contributions to the financial sector. However, following the official inquiry into the collapse of HBOS, he requested that this honour be revoked in 2013. His knighthood was officially annulled on 11 June 2013.
Early life
Crosby was born in Leeds and received his education at Lancaster Royal Grammar School from 1967 to 1974. He pursued higher education in mathematics at Brasenose College, Oxford.
Early career
Beginning his professional journey at Scottish Amicable Life Assurance in 1977, Crosby qualified as a Fellow of the Faculty of Actuaries by 1980. In 1991, he became one of the founding directors of J Rothschild Assurance, which later developed into the wealth management firm St. James's Place plc.
HBOS
In 1994, Crosby joined Halifax as Managing Director of Halifax Life and was promoted to chief executive officer of Halifax plc in 1999. He spearheaded the 2001 merger with the Bank of Scotland, becoming HBOS Group’s inaugural chief executive. After seven years as CEO, Crosby stepped down in early 2006, leaving HBOS positioned as the fourth largest bank in the UK by market capitalisation. His successor was Andy Hornby, whom Crosby had mentored. In April 2013, the Parliamentary Commission on Banking Standards assigned partial accountability for HBOS’s failure to Crosby alongside Dennis Stevenson and Hornby.
Financial Services Authority
While serving as CEO of HBOS, Crosby was appointed by HM Treasury as a non-Executive Director of the Financial Services Authority in January 2004. He advanced to Deputy Chair of the FSA in November 2007 but resigned from this role in February 2009.
During a session of the House of Commons Treasury Select Committee on 10 February 2009, allegations emerged that Crosby had disregarded warnings from Paul Moore, former Head of Group Regulatory Risk at HBOS, regarding hazardous business practices. Moore had cautioned that HBOS’s rapid expansion increased its exposure to borrower defaults. Moore was dismissed in 2005—a decision he attributed solely to Crosby. He emphasized that HBOS’s accelerated growth and a corporate culture resistant to scrutiny endangered financial stability and consumer interests. Despite receiving positive assessments from both the FSA and audit committee, Moore’s dismissal led him to pursue legal action against HBOS for unfair dismissal under whistleblowing protection laws.
On 11 February 2009, Crosby resigned from his post at the FSA, reportedly to prevent further damage to the regulator’s reputation amid controversy. The FSA acknowledged it had concerns about HBOS before Moore left, which raised issues about potential conflicts of interest involving FSA board members who also had ties with regulated institutions. Moore gained backing from a former HBOS employee who accused the bank of weakening risk management standards.
Following Lloyds Banking Group’s acquisition of HBOS, losses amounting to £10 billion were reported by HBOS, partly due to conservative asset write-downs applied under Lloyds’ accounting policies. George Osborne, then Shadow Chancellor, criticized executives like Crosby for their significant role in generating losses that depleted government bailout resources.
Links with HM Treasury
On 11 July 2006, Crosby was designated by then Chancellor of the Exchequer, Gordon Brown, to head the Government's Public Private Forum on Identity Management, which focused on addressing challenges such as identity fraud. In recognition of his contributions to the financial sector, Crosby was awarded a knighthood in the 2006 Birthday Honours.
In April 2008, Crosby received an appointment from Chancellor Alistair Darling to chair a Working Group composed of mortgage industry specialists tasked with advising the Government on enhancements to the mortgage market.
Other roles
Crosby led Gordon Brown's Identity Assurance review in 2006.
Additionally, he held the position of non-executive director at television broadcaster ITV and acted as a trustee for the charity Cancer Research UK.
Parliamentary Commission on Banking Standards
On 3 December 2012, Crosby gave evidence before the British Parliamentary Commission on Banking Standards concerning his tenure as Chief Executive during the Collapse of HBOS.
According to the Financial Times, Crosby was reluctant to surrender his knighthood, describing it as a "huge honour" while admitting that his public standing would be permanently affected. Unlike Fred Goodwin, former RBS chief executive who was stripped of his knighthood, Crosby initially resisted relinquishing his title. He also acknowledged that he did not anticipate being allowed to manage a bank again. His successor, Andy Hornby, offered "heartfelt apologies" for HBOS’s near collapse in 2008.
The commission convened amidst cautions from Bank of England executive Andy Haldane, who compared the banking crisis's consequences to those of a world war, warning that its costs would likely impact future generations and fuel public discontent.
Following these events, Whitehall's honours forfeiture committee approved Crosby's request to have his knighthood revoked.