Lord Stephenson - dishonest or delusional?

Ex-chairman of HBOS called to account.

The Bank of England has said that the economic impact of the financial crisis was on a par with the Second World War. And the wannabe Inglorious Basterds on the Parliamentary Commission on Banking Standards continue to call to account the war criminals.

It all feels a bit like old news now… We know full well that HBOS was badly run. We know about the secret bailouts, the “spirit of optimism” that led to disaster.

This week it was the turn of Lord Stephenson. The ex-chairman of HBOS was - and still is - suave and silver-tongued. He is the kind of man who you believe when he says something like

..there was just no way we [the HBOS leadership] were encouraging a culture of excessive risk-taking.

But one committee member – Lord Lawson – wasn’t having any of it. “You are living in cloud cuckoo land,” he said.

And to remind ourselves just how risk-averse HBOS was in the lead-up to the melt-down, we should recall the story of Benny Higgins. A bona fide banking superstar, Benny Higgins joined HBOS in 2006 from RBS, where he had overseen the successful integration of NatWest into the group.

After less than two years, he left HBOS under a cloud, having presided over the dramatic reduction of the bank’s  mortgage book. With hindsight it sounds prudent and praiseworthy action. At the time, however, he was universally pilloried for presiding over such a huge loss in market share.

And in the wake of this “disaster”, silver-tongued Stephenson was there to reassure twitchy stakeholders that the bank would bounce back and regain its position in residential mortgages. Not only that, but he wrote to the FSA (a letter since published by the Commission), emphasising that HBOS was a “highly conservative institution”.

I am not aware of any lurking horrors in our business or our balance sheet. Quite the reverse ... HBOS in an admittedly uncertain and insecure world is in as secure a position as it could be.

Happy to be crossed questioned on this but I hope you know me well enough to know this is neither a bravura nor an ill considered statement.

There you are – a man in control… Confident and reassuring. A year later the bank had been merged with Lloyds and was being bailed out by the taxpayer to the tune of £17 bn.

We could rely on Lord Lawson to remind Stephenson just how much bravura there was in that statement. “Either you were being dishonest when you wrote that or, if you believed it, you were delusional,” he said.

“Spirit of optimism” at HBOS: Photograph: Getty Images

James Ratcliff is Group Editor of  Cards and Payments at VRL Financial News.

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Westminster terror: Parliament hit by deadly attack

The Met Police is treating the events in Westminster as a "terrorist incident". 

A terrorist attack outside Parliament in Westminster has left four dead, plus the attacker, and injured at least 40 others. 

Police shot dead a man who attacked officers in front of the parliament building in London, after a grey 4x4 mowed down more than a dozen people on Westminster Bridge.

At least two people died on the bridge, and a number of others were seriously hurt, according to the BBC. The victims are understood to include a group of French teenagers. 

Journalists at the scene saw a police officer being stabbed outside Parliament, who was later confirmed to have died. His name was confirmed late on Wednesday night as Keith Palmer, 48.

The assailant was shot by other officers, and is also dead. The Met Police confirmed they are treating the events as a "terrorist incident". There was one assailant, whose identity is known to the police but has not yet been released. 

Theresa May gave a statement outside Number 10 after chairing a COBRA committee. "The terrorists chose to strike at the heart of our Capital City, where people of all nationalities, religions and cultures come together to celebrate the values of liberty, democracy and freedom of speech," she said.

London Mayor Sadiq Khan has tweeted his thanks for the "tremendous bravery" of the emergency services. 

Labour leader Jeremy Corbyn also released a short statement. He said: "Reports suggest the ongoing incident in Westminster this afternoon is extremely serious. Our thoughts are with the victims of this horrific attack, their families and friends. The police and security staff have taken swift action to ensure the safety of the public, MPs and staff, and we are grateful to them."

After the incident this afternoon, journalists shared footage of injured people in the street, and pictures of a car which crashed into the railings outside Big Ben. After the shots rang out, Parliament was placed under lockdown, with the main rooms including the Commons Chamber and the tearoom sealed off. The streets around Parliament were also cordoned off and Westminster Tube station was closed. 

Those caught up in the incident include visitors to Parliament, such as schoolchildren, who spent the afternoon trapped alongside politicians and political journalists. Hours after the incident, the security services began evacuating MPs and others trapped inside Parliament in small groups. 

The MP Richard Benyon tweeted: "We are locked in Chamber of House of Commons." Shadow education secretary Angela Rayner tweeted: "I'm inside Parliament and me and my staff are safe."

The MP Jo Stevens was one of the first to confirm reports that a police officer had been attacked. She tweeted: "We've just been told a police officer here has been stabbed & the assailant shot."

George Eaton, the New Statesman politics editor, was in the building. He has written about his experience here:

From the window of the parliamentary Press Gallery, I have just seen police shoot a man who charged at officers while carrying what appeared to be a knife. A large crowd was seen fleeing the man before he entered the parliamentary estate. After several officers evaded him he was swiftly shot by armed police. Ministers have been evacuated and journalists ordered to remain at their desks.   

According to The Telegraph, foreign minister Tobias Ellwood, a former soldier, tried to resucitate the police officer who later died. Meanwhile another MP, Mary Creagh, who was going into Westminster to vote, managed to persuade the Westminster tube staff to shut down the station and prevent tourists from wandering on to the scene of the attack. 

A helicopter, ambulances and paramedics soon crowded the scene. There were reports of many badly injured victims. However, one woman was pulled from the River Thames alive.

MPs trapped inside the building shared messages of sympathy for the victims on Westminster Bridge, and in defence of democracy. The Labour MP Jon Trickett has tweeted that "democracy will not be intimidated". MPs in the Chamber stood up to witness the removal of the mace, the symbol of Parliamentary democracy, which symbolises that Parliament is adjourned. 

Brendan Cox, the widower of the late, murdered MP Jo Cox, has tweeted: "Whoever has attacked our parliament for whatever motive will not succeed in dividing us. All of my thoughts with those injured."

Hillary Benn, the Labour MP, has released a video from inside Parliament conveying a message from MPs to the families of the victims.

Former Prime Minister David Cameron has also expressed his sympathy. 

While many MPs praised the security services, they also seemed stunned by the surreal scenes inside Parliament, where counter-terrorism police led evacuations. 

Those trapped inside Parliament included 40 children visiting on a school trip, and a group of boxers, according to the Press Association's Laura Harding. The teachers tried to distract the children by leading them in song and giving them lessons about Parliament. 

In Scotland, the debate over whether to have a second independence referendum initially continued, despite the news, amid bolstered security. After pressure from Labour leader Kezia Dugdale, the session was later suspended. First Minister Nicola Sturgeon tweeted that her "thoughts are with everyone in and around Westminster". The Welsh Assembly also suspended proceedings. 

A spokesman for New Scotland Yard, the police headquarters, said: "There is an ongoing investigation led by the counter-terrorism command and we would ask anybody who has images or film of the incident to pass it onto police. We know there are a number of casualties, including police officers, but at this stage we cannot confirm numbers or the nature of these injuries."

Three students from a high school from Concarneau, Britanny, were among the people hurt on the bridge, according to French local newspaper Le Telegramme (translated by my colleague Pauline). They were walking when the car hit them, and are understood to be in a critical condition. 

The French Prime Minister Bernard Cazeneuve has also tweeted his solidarity with the UK and the victims, saying: "Solidarity with our British friends, terribly hit, our full support to the French high schoolers who are hurt, to their families and schoolmates."

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.