Sir James Crosby's move to be Brown's deputy head at the FSA after his disastrous mismanagement of HBOS is not a tale of poacher turned gamekeeper. It is more poacher finding woods more fertile with game to exploit.
At a time when the banks, with implicit government connivance, are trying hard to pretend that they remain viable, in the face of levels of debt that dwarf the nation's GDP, appointments to the FSA are a critical indicator of the connection of the government with reality. Bankers are in deep denial. They continue to imagine that they can weather this storm, buy back the government's stakes and carry on as they did before. In Crosby they have a convincing mouthpiece. Make no mistake that Crosby has undergone some Damascene conversion; he continues to whisper the bland assurances that Brown wants to hear on behalf of the banks. That he is utterly careless of risk has already been demonstrated. How much more so now when it's taxpayer's cash at risk, taxpayers even more removed from Crosby's care than were his shareholders.
The banks are broken. But our chances of the FSA admitting it, with Crosby and his like at the helm, are zero.