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...apologies from bank bosses could stimulate the economy, Britain's would be outgrowing China's just now. As the former execs in charge of two of the U.K.'s largest banks appeared before a committee of Members of Parliament on Tuesday to account for their role in the financial meltdown, the bankers gave out "sorry"s like mortgage-backed securities...
...Andy Hornby, the former chief exec of HBOS, which was taken over last year by rival Lloyds to prevent a run on the bank, said he was "extremely sorry for the turn of events." Dennis Stevenson, Hornby's chairman at HBOS - which, along with Lloyds, got a $25 billion bailout from the government in return for 43% of the combined group - was "profoundly and unreservedly" apologetic. And really giving it his all, Fred Goodwin, ex-boss of the Royal Bank of Scotland (RBS), rescued by British taxpayers last fall with an even bigger bailout, said he "could not be more...
...Following the collapse in September of U.S. investment bank Lehman Brothers, RBS's depleted capital reserves - a consequence of that ABN deal - meant "the spotlight fell on us, and the share price dropped 60% in two days," Goodwin said. Added McKillop: "We are sorry we bought ABN Amro." At HBOS, said Hornby, who stepped down as its CEO in 2008 after only two years in the job, "years of reliance on wholesale funding left us in a vulnerable position." No kidding. When the meltdown in those markets occurred, HBOS was history. "The fundamental mistake that HBOS made was," said Stevenson...
...Still, for all the needling - bankers were submitted to three hours of lawmakers' questions - taxpayers got little in the way of detail about how or why the banks blew it. Stevenson insisted the HBOS board "was all over" risk management and "stress-testing." It was external factors, he said, that ultimately did it for the bank. Goodwin claimed that at "no point did anyone get the scale or the speed of [the slowdown], and that was what was so damaging about this...
...More tempting for the MPs: the issue of bankers' pay. Goodwin, who said he went without a bonus last year after stepping down eight years into the job, admitted he has lost $7.4 million as RBS shares have plummeted. Amid reports that the bank plans to pay its existing staff bonuses for 2008, all four former execs agreed that changes to the bonus system should be looked at. Hornby reckoned that bonuses "do not reward the right kind of behavior" and suggested they be tied more closely to long-term performance. The 42-year-old, who also went without...