“Even non-bankers with no “credit risk management” expertise would have known that there must have been a very high risk if you lend money to people who have no jobs, no provable income and no assets.”  These are the words of Paul Moore, former head of Group Regulatory Risk, HBOS Plc in a his written evidence to the Treasury Committee on Tuesday, a copy of which has now been published in the Financial Times (Paul Moore’s memo in full).

Mr Moore alleges that he was summarily dismissed for trying to alert the bank’s board to “negligence” and even “recklessness” at the in 2005.  The man he says sacked him was Sir James Crosby, the then CEO of HBOS, who was subsequently appointed as deputy chairman of the Financial Services Authority, a position he resigned from yesterday.

Mr Moore alleges, the financial crisis was completely foreseeable, “caused, not because many bright people did not see it coming, but because there has been a completely inadequate ’separation’ and ‘balance of powers’ between the executive and all those accountable for overseeing their actions and ‘reining them in’.” If this is true, it indicates systemic issues with the way that financial institutions have been managed and regulated for years.

The future undoubtedly will see increased regulation for banks, but it’s going to take a long time for them to start earning back the trust of the general public. Risk management procedures need to be overhauled and risk assessments require complete and accurate information. Financial institutions surely don’t need to wait for governments and regulators to tell them this; they can start now by auditing risk data and ensuring that it is fit for purpose.