When David Gibbons was employed by the OCC he said: “Banks should be sure their credit risk control processes are adequately staffed and appropriately empowered to point out where risk is rising in these portfolios, and to tell managers what they need to hear.”
The main point, as made by the OCC at the time was “To lower the odds of a blowup, federal regulators are zeroing in on a few key areas of perceived deficiency. Dave Gibbons, the OCC’s deputy comptroller for credit risk, is urging banks to do a better job of tracking exceptions to their established underwriting policies and practices for commercial real estate loans. The OCC is encouraging banks to list all loan exceptions and compute the volume of business represented by those exceptions, then evaluate the extent to which the exceptions cause higher risk for the portfolio. The OCC also wants to see strengthened risk management oversight.”
Gibbons is now employed by predatory lender Household International, although he may prefer to think of it as HSBC. Does he tell them what they want to hear, or what they need to hear? Time will tell, says watchdog group Household - HSBC Watch.
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Time did tell in this case. By July 2007 Gibbons was gone from HSBC, the bottom has fallen out of the sub-prime mortgage market, and HSBC Finance is losing billions. If you look at what Gibbons said when he was with the OCC, as quoted above, it does not remotely reflect what happened by July 2007.