Published on 4 Dec 2012

Banking crisis 'as bad as a world war'

On the eve of the chancellor’s pre-budget statement we would do well to memorise yesterday’s testimony to the parliamentary commission on banking standards. It’s pretty shattering stuff.

Take Sir James Crosby – once the CEO of HBOS. Under fire from the politicians, he grudgingly reached the verbal admission that incompetence, at least much as the global financial crisis, had smashed up his bank. He was “deeply sorry” for the HBOS catastrophe.

So sorry that he’s keeping his half million pound-a-year  pension. Oh, and he’s keeping his knighthood, perhaps because he’s so low profile that no one has remembered that he has one, or so it seems. I mean, we have all heard of Fred the Shred Goodwin, but Sir James Crosby?

Oh, and by the way Crosby also admitted he’d sold two thirds of his shares in HBOS in the two years that led up to the bank’s effective collapse. So he was more competent with his own money than he was with ours? Is that an offence? Almost certainly not.

But then these extracted “mea culpas” from both Crosby, and his old HBOS mate Andy Hornby have perhaps eclipsed the most shocking evidence heard at the inquiry yesterday.

Andy Haldane, who looks after financial stability issues at the Bank of England, stated that the banking crisis was “as bad as a world war”. Gosh! And George Osborne is having a bit of a job reducing the deficit.

Hold onto your horses, tomorrow is another day.

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10 reader comments

  1. Jim Partridge says:

    The fact that these individuals have flown under the radar of the mainstream media really tells us a great deal about how poorly the press have been functioning in the last 5 years.
    Simplistic messaging with black and white story telling (Fred Goodwin as the poster child for greed etc..) prevents the real story of the financial meltdown from being told and understood by investors and bank account holders. These people deserve a very large spotlight to be shone on them, including the big 4 accountancy firms for their Audit practices of these organisations…

  2. Saltaire Sam says:

    Tomorrow the poorest in our society will again see their money reduced. Most of them are poor through no fault of their own – ‘there but for the grace of god’. Most of them haven’t brought the situation upon themselves.

    But an incompetent banker, who helped create their misery, will live out his days on half a million a year.

    George Osborne will make sure he ‘makes his contribution’ by some pin prick of a PR measure that Crosby won’t even notice.

    And on Ozzie’s track record, anything that affects the rich will take years to implement while cuts to the poor will happen immediately. And the blame will be switched to local government or the EU.

    We are ruled by charlatans. Wealthy, privileged incompetent charlatans who have no concept of what it is like to worry about paying the rent, or feeding their children.

  3. margaret brandreth-jones says:

    Pension? .. oh yes,I remember thats the thing we used to have in the old days when we elected to pay superranuation for the rest of our working life in the NHS: but then they threw us staff with State qualifications out of the NHS, the state we were originally qualified for and did not allow us to contribute whilst at the same time ensuring that we continue to meet the health needs of NHS patients. Its that thing that new employees working for 10 years will get a living pension out of and those who have been taking care of NHS patients for 50 years get the scraps of the pfi’s that won’t even cover the cost of fuel bills.
    Banks and pensions …..could we do without them? .. no but we could do without the spivvy managers who make shady deals to line their own pockets.

  4. Meg Howarth says:

    (Shouldn’t that be ‘hold on to your bikes’, Jon, in order to link with a recent post?)

    ‘Sorry’ seems to be the easiest word these days, slipping off the tongue like a melting glacier sliding down a mountain. Crosby should hand in his knighthood – and Stevenson his Lordship, then we should get on with abolishing both. Long overdue for UK’s anti-democratic Establishment rituals to become pantomime fodder.

    1. Meg Howarth says:

      STOP PRESS March 2008 letter from Stevenson to ANOTHER financial-service’s knight, FSA’s Callum McCarthy: “HBOS is in as secure a position as it could be”
      http://www.ft.com/cms/88f7461c-3e23-11e2-91cb-00144feabdc0.pdf

      And this guy is deemed fit to help craft UK legislation…! I’m weary of the ludicrous House of Lese Majeste.

  5. Philip says:

    But it seems that many bankers, including those who helped to cause the problem, have done very nicely out of it. I think the First World War would be the best parallel – the chiefs well back from the front sending the infantry “over the top” to be massacred time after time because it was the only way they thought they could win – and the suffering of the millions they caused to be killed, maimed, psychologically scarred was irrelevant to them. At least they didn’t have the callous gall to claim “we’re all in it together”! There’s even the parallel with “benefit scroungers” – the poor men shot for refusing to go over the top to certain death or because they’d had nervous breakdowns from the traumatic sight of seeing friends blown to pieces next to them in the mud of the trenches.

  6. Moonbeach says:

    I share your frustration, Jon. How on earth can a self-confessed incompetent like Sir James Crosby get away with a half million pounds pension and a knighthood?

    Well the answer is self-evident. His peer group are just that; the same as him. Our politicians have endorsed yet another ‘legal’ way of cheating the public about their expenses. Our politicians, again, refused to close the loopholes that allow hyper-rich individuals and corporations to avoid UK taxes. Our chief constables have more than a smattering of liars and cheats amongst their number.

    In this ridiculous coalition, where the only subject they appear to agree on is gay marriage, who on earth is ‘minding the store ‘?

    Labour and Conservative parties are largely the same with the Lib Dems remaining a sick joke that holds the balance of power!

    It would seem to me that the only option for an honest, tax paying believer in democracy is to register a protest by voting for UKIP. It may be that they lack substantive policies, experience and talent but at least they have one policy on which the majority are agreed!

    Talented people will join when we, the downtrodden and ignored, register our severe displeasure with a bunch of mediocrities that presently hold power. And shame on those who voted Lib Dem last time because Nick Clegg looked good on television! You got what you deserved!

  7. adrian clarke says:

    Unfortunately,i agree with most of the posts on here.Who can we trust?Certainly not the Politicians , of ALL parties,yet we elect them.It is time for a huge protest vote,and at this moment in time that has to be UKIP.Yet go back a week and a Party whose MP admits defrauding his electrate by writing false cheques, is still walking the streets.I have not heard that the police have interviewed and charged him yet WHY NOT? As rightly has been said, how can a banker(not sure i have spelt that right) admit to such incompetence yet still keep his knighthood and his pension?.It certainly is one law for us and one for them.How come no ()ankers have been locked up for corporate negligence,fraud for gambling with others monies.I am sure if there was the desire there are offences to be found
    It is definitely time for that protest vote.I used it at the PCC elections ,will do so at the EU elections and at the next General election.I hope millions agree

  8. Steve Willis says:

    I think the admission of incompetence is enough to warrant an investigation into whether or not there are grounds for misfeasance.

    Directors have a duty of care to consider the impact of their actions (I’d include those of their subordinates in this) upon the wider community including; customers, staff and suppliers.

    Failure to do so would amount to misfeasance. It is applicable to all directors including those at banks, the FSA or elswhere.

    I do not understand why misfeasance has not been invoked against directors and former directors of such organisations. Will Channel 4 investigate and campaign for this? It would make an interesting programme for Dispatches – I’d be happy to assist with reasearch.

  9. paul says:

    In your discussion about falling crime figures, i was suprised there was no mention or discussion of figures quoted for cybercrime which is surely on the rise?!

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