British financial regulator Sir James Crosby has resigned as deputy chairman of City Watchdog, the Financial Services Authority.
The move came after allegations that during his tenure as head of British bank HBOS, he sacked a senior manager who warned the bank was growing too fast. The resignation is a blow for prime minister Gordon Brown, who supported Crosby’s decision to step down. However, opposition conservative party leader David Cameron was quick to criticise the premier. “James Crosby, the man who ran HBOS and who the Prime Minister singled out to regulate our banks and to advise our government, has resigned over allegations that he sacked the whistle blower who knew that his bank was taking unacceptable risks,” Cameron said. Meanwhile, Bank of England Governor Mervyn King, warned that the economy is showing no signs of recovering from the global recession. “The United Kingdom economy is in a deep recession, we can’t be confident that over the next year the measures taken by governments around the world will actually improve the ability of the banking system internationally to lend,” he said. “Or indeed that there may not be further measures of a protectionist nature that would damage world trade even more,” King added. The latest controversy came as banking heads faced an ongoing parliamentary inquiry into the financial crisis, which forced the British government to nationalise huge swarthes of its banking system. Unemployment in Britain soared in January, nudging the two million mark, its highest in almost a decade.