SIR James Crosby should provide us with a few more answers tomorrow as to what went wrong at HBOS. The former chief executive of the bank will appear before MPs to face what will be his first public grilling over his part in its downfall.
It is astonishing to think that it has taken four years for one of the main players in the crisis to finally be asked to explain himself. Yet Crosby was part of the frenzied go-for-growth banking culture that ultimately led to catastrophe.
He left HBOS two years before it had to be rescued, first by Lloyds and then by the taxpayer, which may give him some sort of excuse, but he encouraged the expansion of lending, ignored warnings of risk and relied heavily on the wholesale money markets which seized up and left HBOS within days of collapse.
His successor Andy Hornby will also appear before the Treasury Select Committee, At least he has apologised to MPs for what happened. That was in February 2009 when he sat sheepishly alongside his chairman Lord Stevenson and the former chairman and chief executive of Royal Bank of Scotland Sir Tom McKillop and Fred Goodwin.
But unlike Goodwin, who has seen his reputation shredded and his ability to circulate freely in public severely restricted, Hornby has done rather well since leaving HBOS. He has picked up two plum corporate roles, first as chief executive of Boots and latterly at Coral, the bookmaker.
At least he has been penitent, whereas Crosby disappeared from public view, resigning as deputy chairman of the Financial Services Authority in the same month as that early Treasury committee hearing.
There were some raised eyebrows when retired industrialist Sir Ron Garrick, the former deputy chairman of HBOS, recently told MPs that the board was the best he had served on and that he would gladly serve on it again. Either he knew something denied to the rest of us or else he is in denial about the suicidal journey that the board was pursuing.
Crosby and Hornby will be tempted to lay the blame elsewhere, and in fairness there has to be collective responsibility for the banking crisis. But some were more culpable than others and had the power to call a halt when it was clear things were getting out of hand. They must put their hands up and accept they got it wrong.
Green bank can plug funding gap
SHAUN Kingsbury will be an unfamiliar name in Scotland, but the Northern Irishman has landed a top job at an important new venture (see opposite). He has also been handed £3 billion of taxpayers’ money to spend.
As chief executive of the Green Investment Bank he is launching what should be an influential institution. Because it can plug the gap in funding that the traditional banks can no longer afford, GIB can make a difference over whether capital-intensive green energy projects go ahead or not.
The new bank is therefore providing a sort of guarantee to developers that they can embark on what can be 15- or 20-year commitments. For that reason alone, the bank should be regarded as a key element in underpinning what will be a growth industry.
The bank is not doling out subsidies or soft loans. Nor is it a venture fund for risky start-ups. Kingsbury needs to make a profit on his investments, not least because of the money already poured into the banks. For that reason, he will be backing proven technology with a greater chance of success.