Sketch: Arrow points to defective part of capitalism

Related Topics

Overlooked by the portrait of William Pitt addressing MPs, which dominates Committee Room 6 in the Palace of Westminster, something historic is happening – almost without publicity.

As with the Leveson Inquiry, the questioning is led by a barrister; but unlike it, there are a mere handful of spectators to watch it happening. And this is as important; perhaps in the long run even more so.

True, some of the exchanges between key figures from HBOS and the panel of the Commission on Banking Standards set up by Andrew Tyrie, which was yesterday delving into the financial services megalith's catastrophic collapse, can seem as mysteriously arcane as the one between the alien and the French scientist, played by François Truffaut, at the end of Close Encounters of the Third Kind.

But that's hardly surprising. The panel trying to unpick the true causes of the crash is formidable by any standards, as far removed from your run-of-the-mill Select Committee as its possible to be: a former Cabinet Secretary, Lord Turnbull, Tyrie, himself the very clever and independent-minded Tory Treasury Select Committee chairman, and – as Turnbull put it – the "appropriately named" young David Quest, already one of the country's leading banking lawyers.

What's more, all three have read, and understood, 19 ring-folders bulging with documents, a lot of them hyper-technical.

Some of it is all too easy to understand. Like the whistleblower, Paul Moore, who was sacked as Head of Group Regulatory Risk after trying to warn HBOS of the dangers of their relentless pursuit of colossal short-term profits.

Describing the dysfunctional relationship between his role and the sales-driven culture of the company, he recalled that he had been told by Jo Dawson, the woman who would succeed him: "I'm warning you. Don't make an effing enemy of me."

In his attempt to assess the true risks, not only to customers who didn't understand them but therefore to the bank itself, he encountered "threatening behaviours" of colleagues who hid pieces of his paper, didn't turn up to meetings, were rude and swore at people in his team.

He plugged his call for a change to the "fiduciary duties" in company law encouraging short-termism. And for those monitoring risk to report only to non-executive directors. "When you oversell credit, you always end up with some credit loss," he said. Moreover, the linking of employees pay to sales targets "were at the heart of this".

The panel asked Ms Dawson about the period after 2005. Unsurprisingly, she was more hesitant in her evidence. But she did agree with Turnbull that, despite not being part of the corporate division when it was claiming that it was pursuing a "conservative" approach to risk, she too had heard the talk, in Turnbull's masterly understatement, that it was just the place to put an "adventurous proposition" and get a "very quick decision".

A generation ago, the great Sunday Times journalist Murray Sayle said there were two types of investigative story: We Name The Guilty Men and Arrow Points To Defective Part.

This inquiry falls in the latter category – as Turnbull said, to try to find how it was all "allowed to happen".

But these are the defective parts of capitalism itself. And there may even be a few guilty men thrown in.

Spread the privilege...

When David Cameron announced that he wanted to "spread privilege" last month, this Sketch suggested it sounded "like something Fortnum and Mason might patent". The upmarket store was clearly reading, because yesterday it launched a Plum & Claret Privilege Spread – designed for "aristocrats and artisans alike".

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Recruitment Genius: Head of Content and PR

£35000 - £37000 per annum: Recruitment Genius: We are 'Changemakers in retail'...

Recruitment Genius: PHP Developer - Mid / Senior

£25000 - £40000 per annum: Recruitment Genius: This fast growing digital agenc...

Recruitment Genius: E-commerce Partnerships Manager

£50000 - £100000 per annum: Recruitment Genius: This is a newly-created partne...

Day In a Page

Read Next
Zoe Sugg, aka Zoella, with her boyfriend, fellow vlogger Alfie Deyes  

If children are obese then blame food manufacturers, not Zoella

Jane Merrick
Amos Yee arrives with his father at the State courts in Singapore on March 31  

Singapore's arrest of a 16-year-old YouTuber is all you need to know about Lee Kuan Yew's legacy

Noah Sin
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor