Top executives who once presided over Britain's financial industry apologized today. The former bankers were at the heart of the near collapse of banks last fall. The World's Laura Lynch reports from London.
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MARCO WERMAN: Four former bankers at the heart of the financial crisis in Britain were paraded before Parliament in London today. They were top executives of two banks that were bailed out by the government -- to the tune of about $55 billion dollars. The men offered apologies to just about everyone they could think of, but it may not be enough to stem public anger. The World's Laura Lynch reports.
LAURA LYNCH: There they were – four men who once presided over the near collapse of banks that were once the pride of Britain's titanic financial industry. Now, they are the poster boys for all that went wrong. One by one, they humbled themselves before members of Parliament.
TOM MCKILLOP: There's a profound and unqualified apology for all the distress that has been caused.
FRED GOODWIN: Unreservedly sorry.
MCKILLOP: Full apology, unreserved apology.
GOODWIN: We are extremely sorry for the turn of events that's brought it about.
LYNCH: Tom McKillop and Fred Goodwin – formerly Chairman and Chief Executive of Royal Bank of Scotland. Now, taxpayers own almost 70 percent of it. Dennis Stevenson and Andy Hornby held the same posts at Halifax Bank of Scotland. It, too, owes its survival to a government bailout. They've apologized before, but today was about a very public reckoning. They were grilled about bad judgments and bad deals. They admitted they made some mistakes, but also claimed it was nearly impossible to see the calamity coming last fall. Parliamentarian Nick Ainger then turned to Andy Hornby to explain how billions in bonuses can be paid out to bankers despite their failures.
NICK AINGER: People understand bonuses being a bit of a top-up on their salary – not 10 times their salary. How on earth did the banking system allow this to develop?
ANDY HORNBY: There is no doubt that the bonus systems in many banks around the world have proven to be wrong in the last 24 months.
LYNCH: The politicians weren't finished with Hornby yet. The 42-year-old may have been dumped from his post, but he's still earning more than $87,000 a month as a consultant – advising those who took over his faltering bank. Member of Parliament John Mann taught Hornby a new term today, when he quizzed him about how much an unemployed man his age receives from a Job Seekers Allowance, or JSA.
JOHN MANN: How much is JSA for an adult, say, age 42?
HORNBY: Sorry. I beg your pardon?
MANN: How much is JSA for an adult of say, age 42? Job Seekers Allowance?
HORNBY: Sorry. It's – I don't know a precise amount, but it's a very low quantity of money.
LYNCH: For the record, it's about $87 dollars a week. For three hours, the political theater played on for a public that is angry, anxious, and looking for a little humility from Britain's banking bigwigs. The men who appeared today might have satisfied everyone on that score, but they may have been trumped by word today that some other managing directors of these failed banks are ready to sue if they don't get their bonuses. Their lawyer, Ronnie Fox, says the executives – who he won't name – don't feel there's anything morally wrong with their demands.
RONNIE FOX: No, they don't say that, because the number of people who are actually to blame – the number of people who are at fault is tiny. Unfortunately, all bankers have been labeled villains. They're said by the government to be the cause of a lot of economic problems, and that's just not so.
LYNCH: Outside today's parliamentary hearings stood a small group of bank employees, protesting at the price they're paying for their former boss's mistakes. The head of their union, Derek Simpson, listened closely to the proceedings and didn't find much solace.
DEREK SIMPSON: I think it's probably well and good that people say they're sorry, but it doesn't change the situation, does it really? Thousands of ordinary bank workers who are loyal, professional people in the banks are possibly going to face losing their employment as a result of this practice.
LYNCH: As if on cue, minutes after the hearing ended, the Royal Bank of Scotland announced it's slicing twenty-three-hundred more jobs. It's unlikely any apology can cushion that blow. For The World, I'm Laura Lynch, in London.
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