Sir Humphrey Would Be Proud

Today we have been treated to the spectacle of four bankers - two each from RBS and HBOS - sitting before the Treasury Select Committee of the House of Commons trying to explain why their banks had lost so much money that they had gone bust and the extent of their combined incompetence had wrecked the economy. They are sorry, they say, as they pocket their still enormous salaries. For years, financial wizards have justified their gargantuan salaries and bonuses on the grounds that they were creators of great wealth. The trouble is that the good times were no better than a few good nights on a roulette wheel; the collapse shows that in the end it is only the casino that will win. And surely, no banker will think of his bank as no better than a casino? It was wealth created like the tricks of real wizards and conjurers; it was all smoke and mirrors - mere fantasy.

The financial industry still does not seem to appreciate the levels of anger in the general population, These people have lined their nests with great wads of banknotes for many years; they have been paid sums which no other profession could approach and yet when the whole pile of cards collapses it is the little people that will have to bale them out - and still they want their bonuses. The government is to investigate the banks and to consider the matter of bonuses. In an appointment of which Sir Humphrey Appleby would have totally approved, the government has selected someone who is "sound". A man who will know what is required; who will know what conclusions need to be drawn; who will take his time reporting; and who, finally, will recommend that hardly anything be changed. Is Sir David Walker likely to take a rigorous approach to his remit? Highly doubtful. He is there to engineer a paint job. To apply a coat of whitewash.

I want to see someone appointed who is not of "The City", is not a member of the financial establishment and will recommend a system of proper regulation of all parts of the system. They can have their investment banks and their hedge funds and the rest, but these must be separate from proper banks. As someone said recently - we need to have old-fashioned banks - boring institutions, where the managers borrow at 3%, lend at 5%, then go down the golf club. That is a business model that we can all understand.

The reason why these great disasters occur is that no one truly questions anything as long as the money continues to roll in. It was like that when Nick Leeson wrecked Barings Bank. Many people saw what he was doing but he made money and boosted the profits - and, presumably, the bonuses - until things went wrong and he panicked and he took bigger risks until the whole structure collapsed in ruins. Then, suddenly, no one knew.

There are many disasters in history where at the subsequent inquests the men in charge have apologized and said that they never knew. All of the men at the top of these banks knew and, for the most part, they gave the instructions. If what they have done is not criminal negligence, it should be.

Who will rid us of these profligate gamblers and spenders.