Last summer, I called my friend Marie in New York to find out her husband’s predictions for the economic days ahead. I’ve never been sure what Ernie does investment banking? hedge funds? just that he does something with money and does it well. ‘He says it’s impossible to predict,’ Marie told me, ‘but fasten your seatbelt.’It sounded like good advice, and I took it. I put a freeze on hiring, cut back spending and ignored the voices that said ‘this is a good time to invest’. The seatbelt sign was never turned off. Even an economic dodo like myself could feel the turbulence.
But yesterday, the seatbelt wasn’t enough: I needed a life jacket and an oxygen mask, as I listened to the four bank executives appearing before the Treasury select committee. I felt myself lurching forward I swear I banged my head. What set me going was the reply that Lord Stevenson, former chairman of HBOS, gave when asked if saying he was sorry was the hardest part. ‘No… There has been a lot of thought about the S word… We are profoundly, and I think I would say, unreservedly, sorry at the turn of events.’ Never have I missed the late Anthony Clare more. If only he were here to put Lord Stevenson ‘In the Psychiatrist’s Chair’ and help him understand that this sort of response looks like detachment of the most extreme kind.
Apparently, the bankers, told that they must apologise, were given ‘coaching’. The problem is you can’t give 10 years of psychoanalysis in a couple hours of PR coaching. All the same, even an amateur drama teacher could have told them to avoid the third person, stay away from phrases such as ‘turn of events’ and qualifiers such as ‘I think I would say’. ‘Look sad, for god’s sake,’ the teacher would say. ‘Think about your dog dying! Put your head in your hands.’ If you aren’t truly, deeply, madly sorry, at least look like you are.
It was bad, but as the questions moved on from contrition, it got worse. Asked about their banking qualifications, the former chairman of Royal Bank of Scotland (RBS), Sir Tom McKillop replied: ‘I don’t have any formal bank qualifications.’ Sir Fred Goodwin, former chief executive of RBS, answered: ‘I don’t know whether you would call them banking qualifications, but I have a degree in law and I qualified as a chartered accountant.’ Andy Hornby, former chief executive of HBOS, told the committee: ‘I have an MBA from Harvard.’ And Lord Stevenson said: ‘I have no formal banking qualifications.’
I admit that there’s a lot about banking I don’t understand. I’ve always been amazed that if you got a First in Greats, you’d be scooped up by an investment bank even if you added up on your fingers. But recently, I’ve been re-thinking about qualifications, spurred on by another recent crash.
The US Airways plane that crash-landed in the Hudson River. The pilot, C. B. ‘Sully’ Sullenberger, has been lauded for his masterful actions in landing the plane flat on the water and avoiding nearby Manhattan. Less well known: the pilot walked the aisle of the downed jet twice looking for passengers before leaving the sinking plane. Sully, age 58, has more than 40 years of flying experience.
A graduate of the Air Force Academy, he has two Masters degrees, flew Phantoms in Vietnam, works with the University of California at Berkeley to find ways to avoid air disasters. Experience, focus and professionalism. His belief that he was personally responsible for those under his charge prevented the crash from becoming a catastrophe.
Our banks, indeed the global economy, have been in the hands of men who weren’t qualified. Meanwhile, Mervyn King warns that the engines have exploded, and he has no idea where or how we’ll land. Keep your seatbelts fastened.