The hearing was set to start at 9.45am ...
9.45am: The long-awaited reckoning with HBOS and RBS will have to wait a little while longer. Given the queue has been forming outside a chilly Portcullis House since 7.30am, this is hardly surprising. They had better get on with it though. By my reckoning the four bankers on the panel this morning (Andy Hornby, Fred Goodwin, Dennis Stevenson and Tom McKillop) are used to charging £2,000 an hour for their services.
9.52am: Convention question. Should we strip these guys of their honorifics now? It feels odd talking about Sir Fred and Sir Dennis.
9.54am: Of course, that's Lord Stevenson of Coddenham. See what I mean? Confused already.
9.54am: John McFall suggests all his questions have been leaked. If only.
9.55am: Stevenson gets it out of the way straight off the bat: "We are profoundly and unreservedly sorry".
9.57am: His fellow chairman at RBS agrees, as does Goodwin and Hornby. This looks like a co-ordinated apology. What would happen if we were in Japan? There would be tears and swords at this point.
10.02am: What was damaging about this slowdown is that we didn't anticipate how quickly things would turn, says Goodwin. He's right of course.
10.02am: McFall is quoting the Oxford English Dictionary definition of banking at them. I fear this could be a long hearing.
10.06am: McFall and McKillop have a moment of Scottish bonding. The cultural divide between the very Scottish RBS and the very English HBOS is quite apparent when you see their boards lined up together.
10.06am: We've lost a lot of money too, insists Goodwin. That's ok, then?
10.10am: Somewhat surprisingly, Graham Brady MP asks the first decent question. Should short term bonuses be clawed back?
I would rather not be drawn, says Stevenson. We should look fundamentally at remuneration practices, says McKillop.
10.12am: Goodwin and Hornby looked genuinely shell-shocked. This must be terrifying for them.
10.16am: Turns out most of them don't have "banking qualifications". Bit of an unfair question, as I'm not sure there are that many relevant courses for running an international mega bank. Rather sweetly, Hornby says he took all the finance courses he could while doing his MBA at Harvard. He'll be bringing out his scout badges next.
10.22am: Uh oh. McFall is questioning Hornby's assertion that he didn't take cash bonuses. Hornby really looks like he might starting crying. This is quite painful to watch.
10.24am: I'm glad everyone else is worried about Andy Hornby. Iquit comments below: "It looks like a golf club chat - apart from Hornby, who, I suspect by the look on his face, has filled his breeks."
10.29am: Michael Fallon asks McKillop the key question: why did RBS not understand what would happen if wholesale funding markets dried up? We did understand what we were doing, insists McKillop. Er?
10.32am: Hornby attempts to explain why HBOS didn't change course after Northern Rock ... but then asks Stevenson for help.
10.34am: Stevenson chips in to insist that HBOS had very rigorous risk-management and stress testing in place: "The board was all over it." This is a bit surreal.
10.38am: Question: Are you personally culpable Mr Hornby?
Answer: "Please do not suggest I am trying to avoid personal responsibility"
Pleading won't do it, Andy.
10.39am: I am not personally culpable, insists Hornby. Surely, this undermines his rather fulsome apology at the outset of the hearing?
10.48am: John Mann MP goes for the jugular, asking Hornby how much job-seekers allowance is (£60.60, apparently, versus Hornby's £60,000 consultancy), but rather spoils his questioning by moving on to why he was sent the wrong form out as a customer. Can we sort his personal finances out afterwards?
10.51am: Good. McFall comes back to Hornby's insistence that he is not particularly culpable personally.
10.51am: "I fully accept my own role" - I know this is difficult, but what on earth does that mean?
10.55am: It is becoming clear that the decision to part-nationalise these two banks was taken extraordinarily quickly with almost no discussion of the detail.
11.00am: Sir Peter Viggers MP does a good job at looking indignant but singularly fails to nail Goodwin on the question of why he didn't 'fess up earlier. Sadly, the bankers are running rings around some of these MPs.
11.02am: It's hard to decide which of these two banks screwed up more, but their directors are giving a very different performance today.
Scotland 2: England 0
11.04am: Oh dear, we're back on the tedious question about how much training they got. I think they really do want to see Hornby's scout badges.
11.11am: Hornby: "It is clear with the benefit of hindsight that many years of reliance on wholesale funding left us in a vulnerable position."
Actually, reliance on mortgage securitisation is a relatively recent trend. Even back in the 1990s, most British mortgage lenders relied on their depositors instead.
11.14am: I sense the viewers are getting restless for blood.
"MPs are not up to this job - send in the Paxman!" says OvenChips.
I agree, this is frustrating. I wonder whether journalists would be any better at shedding light though. I'm feeling a bit like I do listening to the Today programme.
11.17am: Hornby smiles nervously for the first time at a lame joke about siren voices, then holds his head in hands as MPs turn to the question of whether nay-sayers were bullied into silence.
11.20am: Andrew Tyrie MP hints that Hornby is an underage salesman. Ouch.
11.27am: George Mudie MP: we didn't bring you here for a public humiliation; we brought you here to find out what the bloody hell happened.
Not sure they've succeeded, but I'm glad that's how the MPs see it.
11.29am: Like Gordon Brown, the panel is determined to blame international conditions wherever possible. I wonder whether the US banks appearing in Congress tomorrow would try to get away with that one.
11.36am: For those readers wondering where you can see this (if you haven't got Sky) there is a live stream on the parliamentary website
11.37am: They've now wasted best part of half an hour on an arcane row about a supposed whistleblower at HBOS. I wish we could get back to the meat. Fred Goodwin is about to walk off into the sunset any minute now.
11.43am: The fantastically hirsute John Thurso adopts a nice weary tone: "Every time we get bankers from failed banks appearing in front us, we get the refrain that we couldn't see the tsunami coming, but we have seen this before - this is what happens in banking. Where were the non-executive directors?"
11.48am: Interesting admission from Stevenson: "It's very difficult to get non-executives with banking experience on boards."
11.58am: McFall does the Scottish joshing thing with McKillop again over whether they drank malt whisky before board meetings. "I respect the distinguished career you've had in industry," he adds. Puhlease...
Although, I have to say it again, McKillop and Goodwin have so much gravitas about them that you can almost see how they managed to con us all out of billions of pounds.
12.02pm: McFall finally gets angry. He's had endless finance whizzkids in front of him over the years telling him that he's too stupid to understand how much better they manage risks these days. I know how he feels.
12.06pm: Fascinating debate about corporate governance (if that's not a contradiction). The MPs point out that the chairman of the risk committee at HBOS was Charles Dunstone: a fantastic businessman, but not someone you would expect to crawl all over the books looking for flaws to challenge the executives with.
12.09pm: McKillop turns the tables on shareholders: "It would be a very unusual institution that was not seeking their company to grow. They wanted us to return capital and run an efficient balance sheet."
Many big shareholders are learning to regret that obsession now.
12.16pm: Do you compliment the short sellers on their prescience? Good question.
12.17pm: We are agnostic about short-selling, reveals Stevenson. Thanks for that.
12.20pm: Stevenson is finally showing some contrition: "It is quite clear that we were overexposed to property. We made some mistakes. We lent too much."
12.22pm: Michael Fallon tries the Paxo route. "At what point did you realise you were overexposed to property?" he asks twice, with growing frustration.
12.24pm: Goodwin says he only realised recently that RBS was overexposed. Oh to be a fly in the room during that moment of revelation.
12.27pm: Some anti-beard comments coming through from my fellow committee bloggers.
For the record, I think Jim Cousins's beard is not a patch on Thurso's.
12.28pm: Cousins is doing well though on grilling Goodwin about his US exposure - a critical factor in RBS's problems that has received relatively little comment.
12.35pm: Goodwin: "The issue that brought RBS down was a loss of confidence; it wasn't the losses that had accumulated at that point."
This sounds an important distinction but I'm not sure it is. Surely, the markets were just anticipating (correctly) what was about to come.
12.38pm: Cousins to McKillop: Have you asked for any legal advice on criminal negligence?
Ouch.
(the answer was no, by the way)
12.41pm: Criminal negligence! As thomzas points out below, that could well be tonight's TV soundbite.
12.43pm: Andy Love MP is good value:
- I want to hear from anyone who thinks a banking qualification is an important consideration.
- silence
12.45pm: We've been going nearly three hours now. Those pressed shirts are still looking quite starchy though....
12.45pm: Ok. Whose mobile phone is going off? Robert Peston's?
12.46pm: Oops. it was Andy Love's. Didn't put him off his stride though.
12.49pm: McFall is rounding up. Phew.
12.54pm: George Mudie tackles Fred Goodwin on securitisation and I'm watching from behind my hands. I'm not sure this was meant to be a lecture from RBS.
12.56pm: Did you personally understand the complexity of these instruments?
Stevenson: Yes
Hornby: We weren't major players
Goodwin: No, that's what risk management was for
McKillop: Not fully
As I said, Scotland 2: England 0
12.58pm: Were you personally culpable?
Goodwin: It's too simple if you just want to blame it all on me.
He's finally getting rattled.
1.01pm: McFall concludes: You've all said the banks were victims of an unprecedented event. if it happens again, does the taxpayer take it on the chin? Should regulators clamp down or should the government separate retail from investment banking?
1.01pm: Stevenson doesn't like the sound of any of those options. McFall is angry; his public are angry.
1.02pm: This is like a gameshow. All plump for option 2, but without much enthusiasm.
1.03pm: McFall sends 'em all home ... wonders whether this has done enough to assuage public anger. I very much doubt it.
