Through the current crisis, we've been inundated with CEOs of major financial institutions saying "How could we have known that this was going to happen?" When we hear comments like that, there are really only two possible explanations for the institution's problems--either the CEO and the Board didn't listen, or the risk management team failed in its responsbilities to warn management. Thanks to the Financial Times, we have a detailed case study showing that management of HBOS was warned, they ignored the warning, and they shot the messenger: former head of risk management Paul Moore. For a case study in risk management failure, the memo below from Mr. Moore documents what happened at HBOS in detail. In an interesting postscript, the HBOS CEO has been forced to resign the board overseeing the

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