Tuesday, February 10, 2009

Grilling The Guilty Men

Oral evidence
Taken before the Treasury Committee
(Treasury Sub-Committee)
on Tuesday 10 February 2009

Witnesses: Rt Hon Gordon Bennett, Prune Minister, Rt Hon Alasalack Drooling, Senior Placeman

Q1 Chairman: Good morning gentlemen. You have bankrupted Britain. So may we begin with your grovelling apologies. Mr Bennett?
Mr Bennett: As I've said on many occasions, we are profoundly and unreservedly sorry for any inconvenience caused by recent operating difficulties. Deeply, deeplybold regretlymost. But entirely due to unforseeable greedlymost bankers and deepmost incomplibold foreign regulatorybold. Plus, there was a points failure at Watford Junction caused by once-in-one-thousand-years extreme weather conditions.

Q2 Chairman: That's all very well Mr Bennett, but the evening news bulletins need to see you humiliated. Please tell the Committee what formal Prune Minister qualifications you have.
Mr Bennett: Well, I've got a history degree, I've worked in TV, and I've been a professional politician for 25 years.

Q3 Chairman: Hmm. It seems to me you have no formal qualification in prunes whatsoever. Mr Drooling, what qualifications do you have for being Senior Placeman and also - according to what it says down here - Chancellor of the Exchequer?
Mr Drooling: I have a law degree, I've practised as a solicitor, and I've been a professional politician for over 20 years.

Q4 Chairman: So no economic or financial qualifications whatsoever. Mr Bennett, what the public finds difficult to understand is why you failed to have any risk controls in place. You presided over a period of reckless expansion and yet you didn't consider risk at all. Why was that?


Yes, why indeed?

As we watched the bankers being grilled by the Treasury Committee this morning, it was difficult not to notice that most of the questions being directed at them could equally well have been directed at Brown and Darling.

Why didn't they take account of the risks as they recklessly expanded the business beyond anything it had ever susteained before?

Why did they allow the business to become so reliant on wholesale funding from overseas?

Why were none of the senior executives properly qualified to do the job?

Why were their risk management staff so woeful at identifying risks and bringing them to the attention of senior management?

Or did senior management ignore the warnings of their staff in a headlong dash for growth?

It's clearly too much to expect that the Labour dominated Treasury Committee will get Brown/Darling in to ask these questions, but they most certainly should.

As for today's session, the bankers were well up to the Treasury Committee - as predicted. But there was one real bouncer.

It seems that far from having risk management at the centre of their business, in 2005 HBOS actually fired* and subsequently gagged their Head of Regulatory Risk. In a long statement to the Committee, he paints a highly disturbing picture of a bank dominated by the desire to grow at any price.

Just like a certain boom 'n' bust government we could mention.

*HBOS's head of risk was fired by Sir James Crosby, a man who not only got knighted by Brown, but was also made Deputy Chairman of the friggin' FSA!!!! Has Brown ever touched anything that hasn't turned out to be an unmitigated disaster?

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