take on the parliamentary report into the HBOS failure was this; move along now, nothing to see here. How else can you explain him writing stuff like:
“(I)t is not the fact of censure that is odd. It is the timing, and that it's just these three rather than the great gang of bosses of failed British banks” and “(a)ll that said, there is a potential danger in this attempt by parliamentarians at ritual blood-letting so many years after the great crash of 2007-8” and finally “(h)ad the punishments been meted out in 2009 or so, there might have been a great national sense of justice having been done. And then morale in the banking industry - not unimportant to our prosperity - could have been rebuilt.”
So why now and not before? Lets try and find some answers. The first is that the HBoS failure has already been the subject of an investigation by the FSA. A long investigation, so long it wasn’t until September 2012 that the FSA was able to say it:
“(N)ow intends to start work on the HBOS Report and, subject to the legal processes that will need to underpin such a report, would aim to publish it during the remaining lifetime of the FSA, prior to ‘legal cutover’ to the future Financial Conduct Authority.
The purpose of the review will be to:
- explain why HBOS failed and cover the FSA’s supervision of HBOS and explain the focus of the enforcement actions; and
- inform a wider internal and public understanding of the causes of failure during the crisis (to the extent not already covered by the RBS report).
So why now and not before? Because the failure was still being investigated in 2009. And 2010. And 2011 and 2012, meaning publishing anything before now would presumably have been sub judice or something similarly bad. What’s also notable is that whereas the parliamentary committee investigation only took from late last year to now to start and finish its report, the FSA still hasn’t published its report, which I'm guessing is costing millions and is currently being changed to ensure its in line with what the parliamentary commission found (more of which later).
Here, hang on a mo though, hasn’t Robert Peston already covered the FSA looking into HBoS? Yup back in 2011 when the FSA was setting out what in practice was its sequential approach to things which meant it was RBS first, then HBoS, which is handy cos that addresses Robert Peston’s other question about why the “great gangs” of bosses aren’t also being criticised right now; presumably it’s their turn next!
Am still confused though about Robert Peston’s profound memory lapse. Perhaps other factors were/are at work? Like watching the parliamentary enquiry into HBoS what came across very clearly during the initial sessions was how the background research conducted by the the members of the committee appeared to have been restricted to reading the final notice issued by the FSA to one HBoS executive last autumn and little else.
Now obviously these are very busy people so no wonder they weren’t properly prepared. Unfortunately, the FSA note was only able to conclude things like (section 4.15). “the Corporate Division was the highest risk part of HBOS’s business“, which is interesting but - as the new parliamentary report has now made very clear - wrong; the international division was even worse i.e. the latter was actually the highest risk part of the HBOS business i.e. the FSA has wasted years generating an analysis fundamentally wrong at the most basic of levels that has in the process limited the scope for any other actions to be taken.
Now to get a sense of how crap the FSA investigation has been the parliamentary lot end with various questions for them that include:
“The reasons why the FSA did not undertake serious analysis of the quality of the HBOS loan book in the period from 2005 to 2007” and “The extent of losses in each division, which we have had to estimate” i.e. despite years of investigations the FSA still doesn’t know how much was lost at HBOS, where or who by.
The parliamentary boys, bless ‘em, did eventually realise how (self-servingly) cack the FSA was. But, only after they questioned the former international division CEO relatively. During this sessions much of their questioning took the form of a basic fact find, that flagged up their general ignorance, with the more serious stuff taking its cue from the FSA's focus on the corporate division. This meant the former international CEO could respond with stuff like “(w)hat I would say first is that my main day-to-day job was running the international division as part of the organisation” and “clearly, not being involved in the day to day of corporate division, as I have already said, I am describing what I suspect happened” i.e. corporate? Nothing to do with me pal.
Even better/worse, because the questions derived from the FSA’s piece of shit final notice focus on corporate, the former international CEO got away with things like stating how in Australia the business he ran was “principally a retail and SME bank with a small corporate business” and in Ireland “principally an SME business banking book, which is why it was in business banking. We then felt that there was an opportunity for us to grow in Ireland, across the retail, SME and a small amount of corporate business … We had-I haven’t got the detail-a small number of larger corporate loans in the Irish book, but it would be a very little number”.
Really? When I look at the readily available, published portfolio data I see a completely different story, one where corporate, particularly commercial property lending accounted for whopping great loss making wodges of both portfolios. So going back to Robert Peston’s question about why now and not before, clearly the willingness of bosses to impede investigations by misrepresenting the facts, when given a chance and you bet they were given a chance, also forms part of the explanation.
Finally, there’s the demise of the FSA itself and its replacement by the Financial Conduct Authority as from April the 1st this year. Now lets be clear - any report that concludes with 9 questions “on which we expect the FSA to expand” was intended to be published before April 1st. So going back to the question of why now, it's also because it was deemed not politick to do so. I mean c’mon you’ve got the sensibilities of the former boss of the FSA when all this happened (the HBoS collapse, then the ongoing and deeply incompetent investigation into said collapse) to take into account here given he only just got his knighthood in the 2013 new year's honours list followed by a plumb job at Barclays.
As for Robert Peston’s shite about blood-letting and punishments, that is just bollocks noise – oh no all these people on (multi) 6 figure retirement packages might get called incompetent in public and have to give up an additional directorship or something. Oh no. How ghastly.
Like seriously, on the one hand you’ve now got the bedroom tax on the poor, on the other so far just one millionaire has been hit with a half a million pound fine for making decisions that cost a company an estimated £46 billion, which in turn led to a multi-billion taxpayer bailout. Here, let me say that again, these cunts got rich taking decisions that have cost taxpayers billions and billions of pounds i.e. they got rich and look set to stay rich doing things that have cost us all more than every benefit “cheat” in the land has for at least the last decade. These people are the real enemy.
Practically, one approach here is or at least was straightforward; if current law doesn’t allow you to bring these cunts to justice then HR policies should;if the records were still there travel and expenses claims could have been/could be examined along with examples of how they behaved towards staff etc., then they could have at least been dismissed for misconduct on hee haw rather than early retired off on sweet, sweet packages.
The reality of course is this didn’t and won’t happen because doing so would call too many vested interests into question. Much better, it appears, to let people with a vested interest (the FSA) fudge and delay for as long as possible until eventually cheerleaders for the rich and the status quo can start coming out with chat about how this is all very much in the past and that we should all move on now, this despite the very clear links between what they did then and current government policies. Like seriously, how much of a disingenuous with a selective memory cunt is Robert Peston? (My turn for a rhetorical question, the answer is very).