Yes, this is the Daily Mail. In a way, it ought to be. It certainly needs to be. Alex Brummer
But the
responses have been organised chaos with little joined-up thinking.
Unlike their American counterparts,
they were unable, or unwilling, to subpoena van-loads of documents. Nor have
they interviewed most of the participants in the scandal under oath.
The main culprits of the two biggest collapses at the heart of the Britain’s
financial crisis, the panjandrums at Royal Bank of Scotland and HBOS, have run
rings around the regulators.
The 450-page 2011 forensic
examination of why Royal Bank of Scotland failed barely mentioned the former
chief executive Fred Goodwin.
This is largely because his highly paid ‘magic
circle’ lawyers sanitised the report to the point that it was almost worthless.
The three people most responsible
for the implosion of HBOS – former chair Lord Stevenson, and former chief
executives James Crosby and Andy Hornby – have done an even better job of tying
the investigators in knots.
The latest ruse is to challenge
‘independent’ scrutiniser Iain Cornish on the grounds that he sits on the board
of the Prudential Regulatory Authority. One might have thought that reinforced
his qualifications.
Whatever the merits of the
case, the way in which the ‘HBOS Three’ have acted is demonstrable of the
ethical vacuum at the core of finance.
No one is seemingly willing to take
responsibility for gross errors that caused indescribable pain for investors,
taxpayers and the 45,000 or so Lloyds-HBOS workers who lost their jobs.
Just to underline the disjointed
nature of the process, we have also had two other reports, largely at the
instigation of the LibDems, who formed part of the last government.
The 358-page Independent Commission
on Banking came up with the idea of the ring-fence. HSBC is erecting it as fast
as possible.
And as Business Secretary, Vince
Cable – conducting his own guerrilla campaign against the banks – released the
Tomlinson report, which looked at the malpractice of RBS’s Global Restructuring
Group that has now been disbanded.
All this simply shows a deeply
flawed process.
Mark Carney at the Bank of England has, in effect, recognised
the Old Lady’s mistakes in the post-crisis period and in particular the
amateurish and chaotic way in which the business of financial markets has been
conducted.
Markets have been, and remain, one
of Britain’s most important sources of national wealth but have been run with
less concern for safety and integrity than a whelk stall on Brighton seafront.
It is too much to hope that
even a Tory majority government, with all its pals and funders in the City, is
suddenly going to turn around and order a judicial inquiry – however welcome
that might be.
So it is really useful that Carney
has launched an ‘Open Forum,’ to be chaired by Bank director Andy Haldane, to
look at the dreadful things that went wrong, throw light on the Old Lady’s own
shortcomings and examine the fixes.
It wants accountability from firms
operating in London’s complex markets and a willingness to confront the impact
of their behaviour on customers and clients.
Libor fixing cheated every borrower
in the nation; foreign exchange manipulation was costly for ordinary travellers
and big multinational firms alike; dark pools penalise those who deal through
transparent markets; energy market rigging, in a worst-case example, could lead
to the elderly being frozen in their own homes.
These are practices that went
unchecked for too long and were effectively condoned by those at the very top
of the big banking and financial groups.
The threat of ten-year prison
sentences for City sharks will help.
Just as critically, all those engaged in
misconduct need to recognise that, far from doing God’s work, they have been
engaged in a commercial and social evil.
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