I was pleased that Gillian Tett of the Financial Times backed the call I made for a Chilcot/Leveson style inquiry into the banking disaster when we appeared on This Week last night.
When Andrew Neil asked for a ‘yes/no’ answer to the question whether Sir Fred Goodwin should have lost his knighthood, Michael Portillo got a bit uppity that I used neither word in reply, and said simply ‘irrelevant.’
But as I said here the other day, the idea that the loss of a silly bauble for one individual can somehow represent closure on this is a nonsense, and makes us look like a really silly country.
Gillian pointed out that following the American savings and loans crisis, which happened under Reagan, so vigorous were the subsequent inquiries that the number of financiers eventually jailed ran into four figures.
I don’t know if extensive criminality was involved in the banking collapse, but what I do know is that a lot of people in a lot of organisations screwed up big time, and caused havoc in the financial systems and in the lives of millions of people. As Andrew Neil pointed out, the consequences have been greater, and for more people, than the phonehacking scandal which has rightly led to an inquiry into the practices of the modern media. I was among many calling for such an inquiry long before David Cameron agreed to set it up. I expect that one day he will have to set up a banking inquiry too.
Gillian and I seemed to agree that the problem for politicians, bankers and regulators is that there has been no sense of closure on what happened. And there won’t be until there has been a proper reckoning. That means that all of the key players have to sit down in front of a powerful committee of inquiry, and be held to account.
It might mean such an inquiry would recommend the stripping of a knighthood or two; measures to deal with the out of control bonus culture; and ideas for new ways of running financial services. But more importantly, it could look at the whole picture – the role of politicians, regulators, credit ratings agencies, bankers, the lot.
Unless it happens, and unless it leads to change. the public anger will not subside, the politicians will continue to respond to it in a piecemeal way, and we’ll end up learning next to nothing.
So now that Gillian is behind the idea, I hope to see the FT leader pages fill up with calls for such truth, reconciliation and forward plan to be examined in detail and in public.
Banking largely got us into the mess. But it has a big role in getting us out of it. And it won’t be able to do so until that reckoning has happened.