An apology, but don't we need more?

Feb 11 2009 By Andrew Hebden, The Journal

THEY say that sorry is the hardest word, but yesterday as the quartet of downfallen banking giants were hauled before a pack of angry MPs, it seemed the most difficult thing for them to do was to admit any guilt for what has gone on.

The apologies of Sir Fred Goodwin and Sir Tom McKillop, former chief executive and chairman of RBS, along with HBOS executives Andy Hornby and Lord Stevenson of Coddenham, were well rehearsed and perhaps even heartfelt.

Amid almost unprecedented public anger about the size of the bonuses paid to bankers, they had little choice but to slump to their knees and plead for forgiveness.

But that was as far as it went.

There was to be – pointedly – no admission of responsibility for the financial collapse that the behaviour of their institutions predicated.

Less so would there be any meaningful indication as to what had motivated them to make those decisions – like RBS’s purchase of ABN Amro or HBOS’s decision to wade headlong into the property market with little regard for the consequences – that they now so openly regret.

So what did we learn from the quartet’s day in the stocks? What did we gain from the episode, save a sense of satisfaction that they had at last been made to make a public apology?

The nearest we got to an indication of what they believed to be the cause of the problems was a failure to recognise the extent of the approaching downturn and an over-reliance on the wholesale financial markets.

But anyone familiar with the crisis that has come to dominate every news bulletin for the past six months could have told you that.

The work of the Treasury committee may well be commendable and there is an important principle at stake in the fact that MPs can bring to task such individuals who would never otherwise have to speak publicly about the damage they have caused.

Perhaps it is too soon to be trawling through the wreckage of the financial crisis in the hope of finding its true cause. Or perhaps we have the wrong people in the dock.

Certainly, the primary purpose of an investigation such as that being led by the good folk of the Treasury select committee is that, at the end of it, they can provide us with a detailed analysis of what can be done to avoid a repeat of this debacle in future.

The bankers who were dragged before the angry men yesterday may have been sorry about what has happened, but they had precious little to contribute to that analysis.