Given the damage the banks have caused, the spectacle of the former bosses of HBOS and RBS "being put in the stocks" in front of the Treasury Select Committee was a "cathartic moment in the banking crisis", said The Daily Telegraph. Moreover, there was a juicy subplot to the drama. A highlight of the hearing was the testimony of Paul Moore, a barrister, who was head of regulatory risk from 2002 to 2005.
Being a risk manager was like being in a rowing boat "trying to slow down a supertanker", he said. Having warned that the bank was growing too fast, he was sacked and gagged. Sir James Crosby, a former government adviser and chief executive of HBOS at the time, has now resigned from the deputy chairmanship of the FSA, insisting he didn't ignore risk warnings.
Barclays reports solid results
Shortly before the public flogging kicked off, Barclays announced its annual results. "In a banking world full of drunks, Barclays has disgraced itself less than its rivals," said Nils Pratley in The Guardian. It reported earnings of £6.1bn, and while the figure was flattered by one-off accounting items such as the purchase of Lehman Brothers, it helped that the bank is relatively widely diversified; its currency trading was strong and it is expanding its retail operations outside Europe. These helped offset its exposure to the credit market, noted George Hay on Breakingviews.com.
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The question now is whether its forecasts are too optimistic. After all, it would be "reckless" to call the bottom for structured credit markets, and the projected increase in the loss rate on its loan book is nowhere near the level reached in the early 1990s, said Hay. Barclays isn't out of the woods yet.
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