[BITList] Fwd: [From: Mike Feltham] Calling the banks to account

[Michael Feltham]

Begin forwarded message:

From: "guardian.co.uk" <noreply at guardian.co.uk>
Date: 22 January 2009 14:59:49 GMT
To: mj.feltham at madasafish.com
Subject: [From: Mike Feltham] Calling the banks to account

Mike Feltham spotted this on the guardian.co.uk site and thought you  
might like to see it.

To see this story with its related links on the guardian.co.uk site,  
go to http://www.guardian.co.uk/commentisfree/2009/jan/22/treasury-committee-fred-goodwin

Calling the banks to account
MPs should be holding top bankers responsible for their failures, not  
letting them off the hook
Martin Kettle
Thursday January 22 2009
guardian.co.uk


If exceptional times require exceptional remedies, as Gordon Brown has  
often (and rightly) said as the banking crisis has deepened, why have  
our parliamentarians so conspicuously failed to respond to it with the  
necessary urgency? For me, the finger of responsibility points in  
particular at the Treasury select committee.

Here is the problem. Back in July, the treasury committee began an  
inquiry into banking reform. It held two sessions of evidence,  
including a feisty one attended by the Bank of England governor Mervyn  
King. Then, in mid-September it produced its report, which described  
the need for tighter banking laws and regulations as "compelling", in  
particular for the protection of depositors.

So far, even if not very far, so good. Since September, however, the  
banking crisis has worsened exponentially. Not surprisingly, the  
treasury committee has been active too. In October, when MPs returned  
to Westminster, it began an inquiry into the lessons of the banking  
crisis. So far there have been, or are planned, evidence sessions  
involving consultants, trade unions, economists, industry lobby  
groups, auditors, credit ratings agencies, hedge funds and investor  
groups.

The group who have been conspicuously absent from these deliberations  
is a striking one ? the bankers themselves. With the exception of  
representatives from the two banks ? Northern Rock and the Bradford  
and Bingley ? that were nationalised during 2008, the bankers have not  
yet been heard from. None of the senior executives and board members  
of Britain's ailing banks has yet given evidence, Maybe they will do  
so in time. But why have they not been called to account more urgently?

These are the people, after all, who since the second quarter of 2007  
have presided over an bone-jarring collapse in bank values. Royal Bank  
of Scotland has plunged from a market value of ?120bn in 2007 to ? 
4.6bn today. Citigroup has fallen from ?255bn to ?19bn. Barclays from ? 
91bn to ?7.4bn. HSBC from ?215bn to a less catastrophic ?97bn. The  
collateral damage from their years in power is all around us.

Not surprisingly, Britain's bankers are among the most unpopular and  
least trusted people in the country right now. Fred Goodwin, for  
example, the man who famously presided over Royal Bank of Scotland's ? 
28bn losses before he retired with a personal payoff of ?8.37m, has  
never ? as far as I can see ? been required to account in the public  
arena for his negligence. If he had been a social worker or a police  
officer, the entire political class would be baying for his blood. So  
why not a bit of the same urgency against "Fred the Shred" and his  
colleagues?

It's not, I think, that the treasury committee is politically  
reluctant to do this. The inbuilt Labour majority on the committee has  
no particular interest in shielding the bankers from a public  
accounting. They, and parliamentarians as a whole, probably think that  
politicians' stock would rise if they were seen to be treating  
Britain's bankers the same way that congressman Henry Waxman and his  
House oversight committee treated their American counterparts a few  
months back. I may be wrong about this, though. Under John McFall, the  
treasury committee spent much of the period from 1997-2007 following  
an agenda that dovetailed with that of chancellor Gordon Brown; in  
those days, the committee had the feel of a stitched-up Brown  
cheerleading group. So it may be that the word has again come down  
from on high not to beat up on the bankers too much. But I've been  
pleasantly impressed by some of McFall's interventions during the  
crisis; he seems to have discovered his own voice, and it is not  
necessarily that of Little Sir Echo, as it once was.

I think the truth is that the MPs simply haven't thought about this  
aggressively or originally enough. They ought to be summoning and  
subpoenaing the Goodwins of this world to come and give evidence in  
public right now, not at some distant date in the future. They ought  
to be planning to bring them back again for further sessions. They  
ought to be giving them a hard time. They ought to be making the  
political weather. That they haven't done so thus far smacks of the  
limited ambition of our current parliamentarians. MPs should not have  
to wait for the government to give them the green light on whether or  
how to use or extend their powers. They ought to want to make the  
country listen and watch. This is not just a failure of the system but  
a failure of the whole culture.

Copyright Guardian Newspapers Limited 2009

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