Bankers have made an "astonishing mess of the financial system" and UK banks such as HBOS and Royal Bank of Scotland have been "the principal authors of their own demise", a report by an influential committee of MPs has concluded. The Treasury Select Committee, which has been investigating the banking crisis, pinned much of the blame for the financial meltdown on the banks and criticised the "risk-taking" culture within the sector. "This was a failure not only within individual banks but also of the supervisory system designed to protect the public from systemic risk," the report said. John McFall, chairman of the Labour-controlled Treasury Select Committee, said: "The banks have failed to govern themselves effectively: senior managers failed to understand the investments being made in their name; risk management and due diligence were seemingly ignored; and the non-executive directors, often eminent and hugely experienced individuals, failed in the proper scrutiny of the banks' activities." The Committee, due to publish a further three reports on the crisis, including one on bank remuneration, pinpointed Royal Bank of Scotland's ill-fated acquisition of Dutch bank ABN Amro. "The purchase of ABN Amro which was intended to sustain that [growth] trajectory only served to prove how reckless RBS's growth had become and how it had overreached itself," the report said. It also found lack of discipline over capital and liquidity was at the heart of the crisis at HBOS, the mortgage lender that had to be rescued by Lloyds TSB. "Rather more emphasis was placed in HBOS's evidence to us on the catastrophic global context of recent events than on a genuine recognition that responsibility for the company's plight lay with the board and the board alone." The committee also referred to Lloyds' rescue of HBOS, which the report said had been likened in some quarters to a "shotgun wedding". http://www.ft.com/cms/s/0/bdd68052-35e7-11de-a997-00144feabdc0.html Banker´s "integrity" has a new meaning !
Banks being risk averse to the "handshake" of days gone by. The irony. I guess you can't regulate integrity.