Post by Peltigera on Feb 10, 2009 5:19:24 GMT -5
MPs question former bank bosses
The former bosses of the two biggest UK casualties of the banking crisis are being questioned by MPs.
Royal Bank of Scotland's former chief executive Sir Fred Goodwin and ex-HBOS head Andy Hornby are among those giving evidence to the Treasury Committee.
They are being quizzed over the mistakes which led to the banks being bailed out by the government.
The subject of bonuses is also expected to be raised amid reports RBS is to pay out £1bn to some bank staff.
Under the terms of October's bank-bailout, no board directors at partly state-owned firms will receive any cash bonuses this year.
But Prime Minister Gordon Brown has expressed anger over proposed pay-outs to other workers and said he wanted employees to consider waiving their right to them.
Huge losses
Sir Fred, former RBS chief executive, and Sir Tom McKillop, who was chairman, are appearing before the Treasury Committee alongside Lord Stevenson and Mr Hornby, respectively former chairman and chief executive of Halifax Bank of Scotland .
Sir Fred oversaw a number of acquisitions that made Edinburgh-based RBS one of the world's biggest banks.
But his takeover of Dutch rival ABN Amro late in 2007 is now seen as ill-timed and a deal too far in light of RBS's inability to survive the credit crunch without a massive injection of government funds.
Indeed the bank has said it made a loss of up to £8bn in 2008 and will have to write off £20bn worth of assets relating to the takeover of ABN Amro.
RBS is now nearly 70%-owned by the taxpayer after a government rescue package was put in place at the end of last year.
Sir Fred is expected to defend his record staunchly, having reportedly complained that October's rescue plan was "less of a negotiation, more of a drive-by shooting".
Sir Tom stepped down earlier this month, two months earlier than planned.
A former boss of drugs giant AstraZeneca, he apologised to RBS shareholders last year for the bank's problems.
No easy ride
HBOS was rescued by Lloyds and the merged group is now more than 40%-owned by the government.
Mr Hornby stepped down from his post as head of HBOS after the takeover by Lloyds, although his position was already in doubt. He waived a big pay off when he left.
He joined Halifax from Asda in 1999, and is credited with bringing a retailer's dynamism to the more sedate world of banking. He became chief executive of the merged Bank of Scotland and Halifax in 2006.
Lord Stevenson also stepped down after the Lloyds takeover and said he would not be taking any pay off.
He joined Halifax as a director in 1999, becoming chairman in July the same year. After the merger with the Bank of Scotland, he became chairman of HBOS.
The bosses still in place at the helm of Britain's leading banks will appear before the Treasury Committee on Wednesday.
The BBC's chief economics correspondent Hugh Pym said committees rarely offered an easy ride and it was hard to see the banking chiefs having a comfortable time.
Story from BBC NEWS:
news.bbc.co.uk/go/pr/fr/-/1/hi/business/7880292.stm
Published: 2009/02/10 09:53:56 GMT
© BBC MMIX
The former bosses of the two biggest UK casualties of the banking crisis are being questioned by MPs.
Royal Bank of Scotland's former chief executive Sir Fred Goodwin and ex-HBOS head Andy Hornby are among those giving evidence to the Treasury Committee.
They are being quizzed over the mistakes which led to the banks being bailed out by the government.
The subject of bonuses is also expected to be raised amid reports RBS is to pay out £1bn to some bank staff.
Under the terms of October's bank-bailout, no board directors at partly state-owned firms will receive any cash bonuses this year.
But Prime Minister Gordon Brown has expressed anger over proposed pay-outs to other workers and said he wanted employees to consider waiving their right to them.
Huge losses
Sir Fred, former RBS chief executive, and Sir Tom McKillop, who was chairman, are appearing before the Treasury Committee alongside Lord Stevenson and Mr Hornby, respectively former chairman and chief executive of Halifax Bank of Scotland .
Sir Fred oversaw a number of acquisitions that made Edinburgh-based RBS one of the world's biggest banks.
But his takeover of Dutch rival ABN Amro late in 2007 is now seen as ill-timed and a deal too far in light of RBS's inability to survive the credit crunch without a massive injection of government funds.
Indeed the bank has said it made a loss of up to £8bn in 2008 and will have to write off £20bn worth of assets relating to the takeover of ABN Amro.
RBS is now nearly 70%-owned by the taxpayer after a government rescue package was put in place at the end of last year.
Sir Fred is expected to defend his record staunchly, having reportedly complained that October's rescue plan was "less of a negotiation, more of a drive-by shooting".
Sir Tom stepped down earlier this month, two months earlier than planned.
A former boss of drugs giant AstraZeneca, he apologised to RBS shareholders last year for the bank's problems.
No easy ride
HBOS was rescued by Lloyds and the merged group is now more than 40%-owned by the government.
Mr Hornby stepped down from his post as head of HBOS after the takeover by Lloyds, although his position was already in doubt. He waived a big pay off when he left.
He joined Halifax from Asda in 1999, and is credited with bringing a retailer's dynamism to the more sedate world of banking. He became chief executive of the merged Bank of Scotland and Halifax in 2006.
Lord Stevenson also stepped down after the Lloyds takeover and said he would not be taking any pay off.
He joined Halifax as a director in 1999, becoming chairman in July the same year. After the merger with the Bank of Scotland, he became chairman of HBOS.
The bosses still in place at the helm of Britain's leading banks will appear before the Treasury Committee on Wednesday.
The BBC's chief economics correspondent Hugh Pym said committees rarely offered an easy ride and it was hard to see the banking chiefs having a comfortable time.
Story from BBC NEWS:
news.bbc.co.uk/go/pr/fr/-/1/hi/business/7880292.stm
Published: 2009/02/10 09:53:56 GMT
© BBC MMIX
