THE former HBOS chief executive Sir James Crosby dramatically resigned as deputy chairman of the Financial Services Authority (FSA) today.
The shock move follows claims that he sacked a former head of risk management at the bank after he warned over the rapid growth of the business.
Sir James said he was confident there was "no substance" in the allegations, but felt the "right cours
e of action" was to resign from the FSA board.
Following the announcement, Prime Minister Gordon Brown said Sir James was "right" to stand down.
Speaking at Prime Minister's Questions, Mr Brown told MPs that the claims made against Sir James, relating to the period when he was HBOS chief executive, would be contested.
"It is right that we investigate serious allegations that are made about the banking system. These are serious but contested allegations.
"In relation to Sir James Crosby, these are allegations that he will wish to defend so it is right that he has stepped down as vice chairman of the Financial Services Authority."
Yesterday the Commons Treasury Committee released evidence by the former HBOS head of regulatory risk, Paul Moore, who said he was dismissed by Sir James in 2005 after warning that the bank was going "too fast".
