Star comment: Banking must not slip back to old ways
Former HBOS chief executive Sir James Crosby did not award himself a knighthood for his "services to banking" and it is therefore not up to him to give the knighthood back.
Nevertheless, his offer to do so is an act of contrition and humility which has been lacking among many of his peers.
He is also giving up 30 per cent of his £580,000-a-year HBOS pension. Again, it is a rare gesture, although the cynical will note that he is, to say the least, still left with enough to live on, and the uncharitable will suggest that Sir James is simply pre-empting action that might well have been taken against him anyway.
The Banking Standards Commission called Sir James the architect of the strategy which led to the collapse of the bank. Although he was not at the helm when the bank hit the rocks, he had steered the course, before leaving the bridge in 2006 and a knighthood winged his way.
His case tells in a nutshell what were the underlying causes behind the financial disaster which ruined several household name banks and led to the economic hangover from which Britain and the globe has still not recovered.
Just a couple of years before the crisis took its grip, Sir James was one of the heroes of the banking industry, no doubt having made a lot of money for a lot of people, and was given a big slap on the back by the banking community and official recognition by the Establishment for his "services to banking".
Officially he had done a great job. Well done James – you can call yourself Sir.
The backslapping club was living in a fools' paradise. They were collectively defying financial gravity and nobody was looking down. And then, suddenly, reality bit and the whole edifice went into freefall.
It was not a culture created by one man. Sir James did not do it all by himself. He, and other leaders of the industry just like him, had an army of willing lieutenants as they took ridiculous risks and gambled on the future.
The public has yet to be convinced that the banking industry has fundamentally changed and that this culture is not still there, temporarily suppressed and hidden.
Gestures by one or two culpable individuals can be appreciated. But banking must not slip back.
