The former heads of banks bailed out by the British state gave unreserved apologies on Tuesday for their conduct, and agreed changes to the bonus system were needed.
The deposed senior executives from the Royal Bank of Scotland (RBS) and HBOS apologised to lawmakers for the “turn of events” that led to their institutions being bailed out by the taxpayer.
RBS needed £20-billion of public money and is now 68% owned by the state, while HBOS has been swallowed by Lloyds TSB in the newly formed Lloyds Banking Group, which is 43% state-owned.
Dennis Stevenson, the former chairperson of HBOS, told the Treasury Select Committee investigating the banking crisis that he and the bank’s former chief executive Andy Hornby were “profoundly sorry”.
Fred Goodwin, previously chief executive of RBS and a man nicknamed “Fred the Shred” for his aggressive style, added: “I apologised in full and I’m happy to do so again.”
He said there was a “profound and unqualified apology for all of the distress that has been caused.”
Many of the bankers said they had personally lost money as a result of the crisis, with Goodwin estimating his losses from devalued shares at about £5-million.
Stevenson said: “We are profoundly and, I think I would say, unreservedly sorry at the turn of events.
“All of us have lost a great deal of money, including of course a great number of our colleagues, and we are very sorry for that.
“There has been huge anxiety and uncertainty caused for particular of our colleagues but also, for periods of time, for our customers.
“And I would also say we are sorry at the effect it has had on the communities we serve,” Stevenson added.
The bankers were also grilled on the size and nature of their bonuses — one of the most contentious issues of the banking crisis in Britain after it emerged that RBS’s new management planned to pay rewards in the coming months.
Hornby called for changes in the bonus system for bankers.
“There is no doubt that the bonus system in many banks around the world has proven to be wrong in the last 24 months,” the former HBOS chief executive said. — AFP