The Sketch: They grovel but still they have learnt nothing

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The Independent Online

"You haven't been invited here to be humiliated. We just want to find out what happened." In the best possible way it came to the same thing. But first, the grovelling. The rich, the famous, the powerful have to apologise. The senior officers, late of the Royal Bank of Scotland and HBOS, knew that and each competed for the most abased position.

In fact, the apologies were rubbish. Artful, deferential, professional rubbish. All four banking titans (their effect, at least, has been Titanic) had learnt the technical aspects of the modern apology from Tony Blair and £40,000 of PR. "I take full responsibility. I apologise unreservedly. But I'm not to blame for any of it." The committee did better than they ever have against bankers. Not only did they score an outright win, they got opinion-forming evidence. John Mann and Nick Ainger asked at least two good questions between them – that's news in itself.

Ainger asked which of the (ex-) chairmen and chief executives among them had banking qualifications. Answer: none. And then John Mann asked who had been responsible for the catastrophe. Precisely the same answer. The apologies were there to show the bankers were contrite, that they recognised their mistakes, felt remorse, and had developed plans so that they'd never let it happen again. All was fabricated.

The weaseling was worthy of the highest level of politics. There was more than enough recognition of risk, for instance. That wasn't the problem. The problem was "risk calibration". This is the modern way of saying they bought junk rated at triple-A which turned out to be 5 cents in the dollar. They talked humbly but proudly of their stress testing systems, their three lines of defence, their five risk committees and 15 assessment work streams. They told us they had been utterly focused on risk assessment, that they had all prepared for the worst, that no one could have listened more carefully to those warning of impending disaster, that in hindsight they had done extremely well. That was the lesson they'd learnt.

So one of them asked Andy Hornby in midflight – if he had done so well, what was he apologising for? And Hornby said: "I don't feel particularly personally responsible." Even in hindsight, they said in their various ways, they had done everything that might have been done. Risk? "The board was all over it. Risk directors were always present!"

Andrew Tyrie put this through a stress test of his own. A "Head of Group Risk" had given evidence to the Treasury Committee. He said he had tried to warn the Board but had been ignored and subject to threats. This was denied. "So he was making it up?" That was denied. Everything was denied.

Tyrie continued. The Risk Director had objected to the fact that his warnings were not included in the minutes. Was that correct? Denied. "He made that up too?" Denis Stevenson said that he had commissioned an independent investigation of these claims. "But," Tyrie said in his worried way, "the FSA said the culture of your bank was 'overly sales-focused and had an inadequate emphasis on risk'." That was dismissed. "But Mr Moore correctly identified the risk and you didn't pay attention to him?" Denied.

At this point George Mudie stepped into the tag team. He spoke plainly. "You're all in bloody denial!" And forcing his way through a series of contradictions, rebuttals and gloves-up rope-a-dope, Mudie told them they'd been running a faulty business model, that their Risk Director had warned them of it, that he'd been sacked as a result, that he'd taken them to an employment tribunal, won his case against them and received undisclosed compensation so long as he abided by a gagging order. The response was that... risk assessment was taken very seriously by the –

But the CEO had personally appointed a successor who had no experience in risk assessment! Someone from sales... True, this new one had "never had a formal title with the word risk in it but –."

The case was made. They have learnt nothing. There wasn't the slightest indication that the heirs of this lot will do anything to prevent it all happening again in the age old way. They should let private equity loose on these companies and rip them back to their profitable core. On yesterday's evidence there's no other way they'll learn.