Banking on experience
17 Feb 09
This week, more from the bank chiefs’ Parliamentary grilling
Without any apology I’m going to return this week to the topic of the Treasury select committee hearings on the banking crisis.
I was rather taken aback by part of the report on the evening news following the committee’s session with former directors of the Royal Bank of Scotland and HBOS. It appeared that Sir Fred Goodwin, former RBS chief executive, had disowned his membership of ICAS.
Let me explain. The question put to Goodwin and the other former bank directors was this: “What banking qualifications have you got?”
Goodwin’s answer (as reported on the news) was “I have a degree in law.”
That was rather surprising – one would think his years of CA training followed by working as an auditor with some of the biggest financial institutions would be rather more relevant. But it was a piece of mischievous editing. Here’s what Goodwin actually said: “Whether you would call them banking qualifications or not, but I have a degree in law; I qualified as a chartered accountant; I was in public practice, including auditing banks for a number of years; I was involved in winding-up banks and then looking at providing advice for banks; I was Chief Executive of Clydesdale Bank; and I was a Chief Executive of Yorkshire Bank before I joined the Royal Bank of Scotland group in 1998 as Deputy Chief Executive.”
I’m concerned that the MPs of the select committee are viewing specialist banking qualifications as a major safeguard for the future. Certainly plenty of career bankers have been among those in the deepest trouble, around the world. In fact, the discipline of the auditor would, one would think, be more valuable than ever to try and avoid the next boom and bust.
This will be an important argument over the next few years and I hope the accountancy profession can make its case forcefully.