How did a largely respectable industry go so wrong so quickly?
But it is true that something appears to have gone badly awry in banking over the past two or three decades.
The old Halifax, when it was a building society, lent money to homebuyers out and took money in from savers. It wasn’t free of warts, but when it sinned its sins were usually as a result of the complacency that comes from being the big kid on the block and having a rather large and stuffy bureaucracy. Meanwhile Bank of Scotland was a highly respected, regional bank that sometimes seemed like something of a commercial offshoot of the Bank of England north of the border. It minted money after all.
These two ingredients combined became HBOS and it nearly broke the country (that’s no exaggeration) before some arguably dubious political and commercial machinations fixed up a rescue from Lloyds.
Barclays was always a little bit more dynamic. A bit more aggressive. Sometimes a little bit fly? But it was still fundamentally respectable. Not any more.
Then there’s the Royal Bank of Scotland, and we all know what became of that.
How did what was once a largely respectable industry go so badly wrong so quickly (it says it all that large parts of it don’t even see that it has gone wrong)?
That’s a challenging question to answer and Andrew Tyrie’s Parliamentary inquiry isn’t blessed with a lot of time. If he and his members succeed, and manage to find some workable solutions for moving forward, they’ll have done a great service, not just to the country but to the industry.
Who knows, they may even help restore the reputation of another institution that has taken something of a kicking recently: that of Parliament.Tagged in: banking, banks, Halifax, Royal Bank of Scotland
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