The three stooges

Coverage of the appearance of three UK bank chief executives before the Treasury Select Committee on Tuesday has focused once again on bonuses. But this focus has once again obscured other equally important issues aired on TUesday. Eric Daniels of Lloyds did his own version of Alastair Campbell’s “I stand by every word”, telling the committee that he thought due diligence around the disasterous takeover of HBOS had been “thorough”.  Asked why the size of support for HBOS from the Bank of England was not disclosed to shareholders when they were asked to vote on the deal, Mr Daniels told the incredulous committee “It was not felt to be necessary”. And then to general consternation he repeated that due diligence and disclosure were “thorough”. Take a look at the testimony on the Parliament website.

Also intriguing was Mr Daniels affirmation that Lloyds had worked  to avoid participation in the Government’s Asset Protection Scheme partly because it feared that accessing more government support would precipitate more onerous directives from the European Union’s competition directorate.

It was fascinating to observe the contrast between the styles of the three protagonists. Stephen Hester of RBS arguably batting on the stickiest wicket was assured, open and businesslike. Shame that one or two throw away self-deprecating remarks “my parents think I get paid too much” have been taken out of context.  What he had to say about the underlying business of RBS was also encouraging, as was Gary Hoffman’s account of the situation at Northern Rock. But Mr Daniels’ style, in turn defensive, stiffly formal, superficially polite then acidly hostile only served to antagonise the committee.

Related links:
MPs grill bank executives on bonus policies

Banquo is still an active investor so will declare his financial interest where appropriate in any blog post.


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Banquo has spent more than 20 years in investment banking and the hedge fund industry, splitting his time between London, New York and Geneva.

Why is Banquo anonymous? Because he operates at a senior level across the financial markets, advising and investing, buying and selling, hiring and firing. He's still in the game but if he has a relevant financial interest in the subject of his posts, you'll know about it. Being anonymous keeps things simple. Banquo will never betray a confidence although he is privy to many.

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