Bankers offer act of contrition

February 10, 2009

In the Middle Ages the four ousted British bankers who brought the Royal Bank of Scotland and HBOS to the brink of collapse would have probably had to endure the public humiliation of sitting in the stocks. 

On Tuesday the likes of former RBS chairman Tom McKillop and  former RBS chief executive Fred Goodwin had to undergo a more civilised form of public humiliation – a grilling by Parliament’s Treasury committee.

Given the public outrage over their huges salaries and bonuses for banks that are receiving state aid the bankers’ parliamentary appearance could have not have come at a worse time.

Not surprisingly then McKillop, Goodwin as well as former HBOS chairman Dennis Stevenson and former HBOS chief executive Andy Hornby were quick to say sorry.

Equally predictable was the froth of parliamentary indignation. “You’ve destroyed a great British bank,” one parliamentarian told Fred Goodwin.

Whether the bankers’ apology before the committee will sate the British public’s sense of outrage against overpaid and failing bankers is questionable. 

But their appearance before the seat of government also raised uncomfortable questions as to the way banks have been regulated in the past and how they will be in the future.

The bankers suggested their pay should be linked to multi-year performance. Are they right? Or does the banking system need more fundamental change?


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Whilst your article alludes to dud banking regulation it does not go far enough and fails to raise the question of the role of loose monetary policy.

It is a pity none of the bankers were able to point to Gordon Brown and tell him that his ineptitude as Chancellor and lately as unelected PM have destroyed a Great (ok, a good-ish) Britain.

Posted by nick | Report as abusive

Presumably the point of doing that would be to instil long-term thinking in the people receiving the bonuses. But I’m not sure there’s necessarily any link between the two.

As a software creator, my “bonuses” were straight royalty payments, which in one sense are every bit as short term as the commissions which make up bankers’ bonuses. My commitment to longer-term success of the business arose instead from my emotional ties to the software I was making and selling. I’m not sure you can legislate for that, especially when for the past 50 years our employment culture has been moving inexorably towards “professional” jack of all trades managers and where all boardrooms come equipped with rotating doors.

The commonest “long term bonus” proposed – shares – has a lot of problems. For one thing, it makes you hostage to people who, for whatever reason, might concentrate on destroying value after you resign (unikely as this may seem, it does happen for a variety of selfish and subtle reasons). CEOs might them find themselves paying less attention to the company, and more to the office politics necessary to ensure a succession agreeable to them.

Posted by Ian Kemmish | Report as abusive

I personally feel that bonuses should only be paid on good performance, but payment should be delayed by 12 months and could be with held if any wrong doing or bad conduct is suspected, thus making bankers a bit more conscientious..

But the main point is that the leader of this country “Gordon Brown” is responsible for over-seeing and managing of the country’s finances financial systems and regulation .. that is his role and that is his sole responsibility to foresee make adjustments as needed to the economy and oversee smooth running of the country for the people..
Politicians never take the blame and always point the finger of blame else where..
I think politicians have become the modern aristocracy, unaccountable over paid and have forgotten that they are servants of the people..civil servant..its time for a change in the system..
Corrupt politicians, civil servant and banker should do prison time, the same as any other fraudsters..
make them accountable!!! then they might do the job they are paid to do rather than lining their pockets with our taxes..
No politicians will be suffering any hardships from this financial crisis be assured their allowances more than cover a lifestyle well out of reach of the average working person and with no threats of redundancies..
“can i get off my soap box now” Thanks j

Posted by jake | Report as abusive

Banking is a service sector. It is as important as health, police,judiciry and parliment. Let it not be, any more of casino or stock market 0ffice.
This service sector deals someone’s money We need HONEST peolpe. Not greedy talented people. No extra rewards. Just pay and regular bonus; the same ratio, anyone gets.
Let the talented people go to research, sports ,game,art and music

Posted by K.Srinivasan | Report as abusive

Every sane and intelligent person out there knows that a culture based on bonus’ and monetary incentives does very little to build an efficient and productive workforce but does wonders for creating greed and deceit.

This is lost on the British style of management because they are so behind the times in their style, expectations and attitudes.

Perhaps if management in this country were better trained and educated so they were able to mentor and train their staff, perhaps if people were paid a decent salary so they would not be so hung up on a bonus making up the shortfall, perhaps if Britain woke up and realised how far behind the rest of the world it really is there may be hope of a recovery.

Judging by what I have seen so far…a miracle is needed.

Posted by Sofia B | Report as abusive

The Rich and Powerful have been running away with all the money and now that events have caught up with them they think that to say sorry will excuse them their actions. It costs nothing to say sorry, so the right answer is prison time and asset confiscation for the perpetrators.

Posted by Jimmer XXXX | Report as abusive

The bankers are all sitting pretty with their huge bonuses and salaries and enormous pension pots – what do they REALLY care about the rest of us. And what’s with the Sir XY&Z – the titles can go too. The “have yatchts” are OK! The bankers should have some (all) of the money they took confiscated back for their crimes then and only then would they really know how the rest of us feel. The Government – well I wish we could do more than simply throw them out of office at the next Election by way of punishment for their mis-deeds.

Posted by Miss not Liz Jones | Report as abusive