We’ve become accustomed to seeing the Royal Bank of Scotland as the poster child for the ills of the banking sector in the run up to the financial crisis.
Since its bail out, RBS has been repeatedly kicked while its former chief executive Fred Goodwin has become a pariah, losing his knighthood, and eventually giving up a slug of his pension. And yet there was another bank where, if anything, the mix of hubris, incompetence, bad management and bad governance was every bit as toxic. That bank is HBOS. However, the man who crafted its mad growth-strategy left a couple of years before the roof fell in, and was able to sell a good portion of his shares.
Sir James Crosby still has his pension. What’s more, he also has his knighthood, his City perks – the non executive directorships gifted to any former chief executive – and, more or less, his position in society. Mr Goodwin, by contrast, isn’t exactly a welcome figure on the greens of Scotland’s premier golf courses.
And yet Sir James’s failings were every bit as egregious as Mr Goodwin’s.
The only difference was that he got out while the going was still good leaving his deputy Andy Hornby to steer the ship on to the rocks. Mr Hornby too, has survived, even thrived, since then with seven figure packages at Boots and at Coral. There is something wrong about that.
It is timely to remember what HBOS was; a retail bank that lent money and took deposits, but which was allowed to take the sort of risks even a dot com might have shunned by regulators who were, sadly, half asleep.
Or who, perhaps, lacked the courage to take on the giant, whose chief executive Sir James was for a time their deputy chairman? Answers to this, and to other questions, are urgently needed.
The commission has done us a service by shining a harsh spotlight on HBOS. There are lessons from its failure that must be learned because its failure is every bit as scandalous as the failure of RBS.