So that's it - the session has come to an end. Thanks for your hundreds of emails. The bankers survived what was a more gentle grilling than they might have feared. Committee chairman John McFall said the session was unlikely to calm the public's anger with them, but thanked them for appearing. They apologised for what had happened to their banks, but did not say they were to blame for it. Their failing, it appears, was not predicting the global collapse in wholesale lending markets. They denied they behaved recklessly. They also rejected claims they were too lightly regulated. They rebuffed suggestions they had ignored warnings of imminent doom. The attention turns tomorrow to the new faces leading Britain's banks, as the same committee of MPs continues its inquiry into what could be - or not - the worst economic crisis in over 100 years.
1309 Lord Stevenson clashes with John McFall, who acuses him of blaming the financial crisis on the government after the former HBOS chairman says the main lesson from the crisis is that central banks and governments must react. Andy Hornby says banks should put more capital away in the good times for when things turn bad.
"Hopefully following this, the banks might be led by people who understand the role of modern banking in society, rather than running supermarkets." Charles Robinson, Newcastle
1302 Proceedings are approaching an end now. Sir Fred Goodwin is being pressed about his record. He says "it's too simple just to blame it all on me".
"So after two hours of questioning and all we have are four men going 'not our fault'. Is there anyone or anything who could ever make these men understand the mistakes they've made and how many lives their greed has affected?" Amanda, West Hampstead
1300 Did the bankers actually understand the complicated financial instruments they were dealing in and which got the system into so much trouble? They all say they did - except Sir Tom McKillop, the former chairman of RBS, who says he did not fully understand them.
1259 Sir Fred Goodwin insists he knew what was in the "sliced and diced" parcels of sub-prime debt it was dealing with - buying and selling it on.
1254 The 39-year-old "whizzkid" Andy Hornby has come in for a bit of flak over his apparent lack of banking experience. His former chairman at HBOS, Lord Stevenson, insists Mr Hornby was hired for his leadership skills not his marketing experience.
"Just like Andy Hornby, I too would be extremely sorry if I was being paid £60,000 a month to offer advice" Tony, UK
1252 Sir Fred is accused of being "in denial" by John Mann who says the culture he created at RBS was to live for the good times and ignore criticism. Sir Fred denies this and insists he "led the bank in a responsible fashion" and did not deliberately ignore problems.
1251 "Andy Hornby is the only one to appear abashed. The other three gentlemen appear quite unrepentant." Gaby, Bridport
The ABN Amro deal was a "bad decision" and was a major factor in the collapse in confidence, and then in December 2008 the share price, of RBS which led to it going cap-in-hand to the taxpayer for a bail-out, admits then chief executive Sir Fred Goodwin. If he had known then what he knows now he would not have done the deal. But he bridles at the suggestion he had fallen in love with his own image as the take-over king, following the successful takeover of NatWest at the start of his tenure as chief executive of Royal Bank of Scotland. He genuinely thought the ABN Amro deal was a "good thing to do".
1249 The ex-bankers are asked if they got too full of themselves. Sir Fred is asked about his placing at the top of a Scottish power list while Andy Hornby is asked about his reputation as a young "whizzkid".
"Is Sir Fred serious? He says his bank was sound and doing good business the day after Lehmans collapsed and he still appears to believe it!" Rob, Birmingham
1244 Sir Tom McKillop is asked whether he has taken legal advice on criminal negligence. He has not.
1243 The collapse of Lehman Brothers in September 2008 was the trigger. They all seem to agree on that. Until then everything was just about manageable. On the day Lehman's collapsed RBS put out a note to staff saying it was in a good financial position in its businesses across 50 countries. Then chief executive Sir Fred Goodwin insists that was true at the time. He also attempts to calm fears that British taxpayers' money will be pumped into RBS investments in car finance firms in the US.
"I am amazed that these bankers don't seem to have any insight into the impact their mismanagement has caused on ordinary people's lives. If I made a mistake in my profession, even if inadvertent, I would be struck off." Raj, Crewe
1234 It was not until March 2008, after the collapse of Bear Stearns, that the scale of the crisis became fully apparent to then RBS chief Sir Fred Goodwin. Until then, it looked as if the problems would be confined to those banks which had made sub-prime loans directly to US homebuyers, which RBS had not done, says Sir Fred.
1229 A Tangled Web blog:
"Amid the furore over bankers' bonuses, these bankers will seek to point out that they have personally been "punished for failure", losing millions of pounds because of the meltdown in their banks' share prices.
These four should apologise to their shareholders for their abysmal decision-making and they should explain why they were asleep at the wheel."
So it's now on the record. Britain's biggest mortgage lender did not see the property price collapse coming. The former chairman of HBOS, Lord Stevenson says it should not have lent as much money to homebuyers as it did. "It is quite clear, with the wisdom of hindsight, that we were over-exposed that we lent too much at the wrong part of the cycle," he says.
1220 Perhaps surprisingly, HBOS is not against short-selling. This process allows traders to profit from falling share prices. Their stance comes despite apparently being victims of it when incorrect rumours were circulated in the market, Lord Stevenson says. The former HBOS chairman says the bank is "agnostic" about short selling, which was briefly banned in the wake of the government's 2008 bail-out.
The bankers are being grilled on their relationship with regulator Financial Services Authority, which has been accused of being "asleep at the wheel" in the run up to the crisis. The relationship with the FSA was "close and continuous" say the former HBOS and RBS men. Ex-HBOS chief Andy Hornby denies it was a "comfortable" relationship and says there was a "good and fair degree of challenge".
"These bankers seem to be telling us that they were all well qualified, behaved well and followed good risk advice, will someone please ask them who they blame for the banking crisis?" Richard Tweed, Croydon
"Almost two hours of questions on their individual qualifications and suitability for their roles, but hardly anything on how to actually stop the bonus-driven risk-taking." Robin, Cambridge
What about the big institutional shareholders? Did they not express any concerns about the banks' behaviour in the run up to the downturn? Sir Tom McKillop, ex-chairman of what was the world's fifth biggest bank, RBS, says that during the good times they were not expressing concerns at all, apart from pushing for more borrowing and greater returns. Concerns only began to surface in late 2007, as the crisis began to kick in.
1208 More questions on whether non-executive directors, who are usually part-timers, are up to the job of overseeing the behaviour of "swashbuckling executive types", to use John Thurso's phrase. The bankers defend their own recruitment policies when it comes to non-execs.
"Andy Hornby just said, smoothly, that there was over 100 years of high quality banking experience on the board, including risk assessment and risk management. The outcome doesn't sound like high quality banking experience and risk management to me!" Trevor Habeshaw, Bristol
1206 Committee chaiman John McFall asks whether banks have just become too complex. Sir Tom McKillop says securitisation, the parcelling up and selling on of debt, was meant to increase stability. Imagine everyone's surprise when it turned out to have the exact opposite effect! "We had no idea of how quickly it could all turn down," says Sir Tom. Ouch.
"Sorry does not go far enough. It's time to dress these guys down properly and remove their titles. No one should retain the title for "Services to Banking" after the performance in 2008." Trevor, London
"I have been watching this for a while now, and I still have no idea what the committee is trying to achieve." Steve, Redditch
1200 More than an hour in and we get the first mention of Dad's Army. "Can we get back to Captain Manwering running banks?" says Lib Dem MP John Thurso. Former RBS chairman Tom McKillop agrees with the sentiment. It makes more sense than Corporal "don't panic!" Jones I suppose...
"Why are MPs not concentrating on what should be done to ensure that the culture that created excessive risk taking and exposed the sector to such an unprecedented catastrophe never rears its ugly head again>" James Poxon, Oxfordshire
"Sounds to me like these bankers are attempting to pass the buck to the FSA and that they're not prepared to stand up and admit that with all their years of experience, they got it wrong." Crispin Mckenzie, Teddington
1152 How did the non-executive directors, which are meant to keep an eye on the behaviour of executives, allow all this to happen? Lord Stevenson says risk was discussed all the time at HBOS board meetings. The bank's only failing, he says once again, was that they failed to see the market collapse coming. Perhaps there needed to be improvements in "stress testing" which is meant to identify potential weaknesses in the bank's business, he suggests.
"I've been listening to the former heads of the banks and I am astounded. The incongruous answers that they're giving proves that these are men have no idea what they were doing. Either that, or they knew what they were up to and were simply greedy." Robert, Leicester
"These guys are being evasive, you can see it in their body language. Also, when is Andy Hornby going to stop referring to things happening before he was chief exec? He was on the Board for many years before that." Rob Davies, Leeds
Lord Stevenson says HBOS (Halifax/Bank of Scotland) was cleared of excessive risk taking by the Financial Services Authority. He denies claims the bank's then chief prevented warnings about risk taking which were raised at a board meeting from being put on the record in the minutes.
"The questions are too timid and the bankers really haven't been put under pressure. I wonder if they'd be willing to give half of their salaries and bonuses from last year back to go into a fund to help those hit most by losing their jobs." Fran Mulhern, London
Meanwhile, back in the committee room the grilling is livening up. "You're all in bloody denial," cries Labour MP George Mudie. The former HBOS executives are getting a dressing down from the MP who accuses them of gambling recklessly with depositors' money. He quotes HBOS's former head of group risk, who apparently was fired by the bank after repeatedly warning bosses they were taking excessive risks. Lord Stevenson, ex HBOS chairman, denies being in denial. But he admits the company's "stress-testing" systems had not worked.
1135 London's Evening Standard newspaper has just arrived on my desk. The front page headline is big and bold saying: "We're profoundly sorry say bankers blamed for crash". (The unrelated front page picture is of a smiling Sarah Brown who was apparently a "surprise guest at the Elle awards in Holloway")
Lord Stevenson is coming under pressure now. He insists that there was not an excessive "sales culture" at HBOS or that it took unacceptable risks, as has been alleged by a former staff member. Lord Stevenson blames the bank's problems on its failure to predict the collapse of wholesale banking markets. That was the "fundamental mistake" that the bank is apologising for today, not its alleged recklessness, he tells the MPs.
"As a long-term NatWest customer and share-holder I'm as angry as anyone at what has happened, but I find this show-trial highly distasteful. Many of the MPs seem less concerned with finding out the truth than with making political points." Jonathan Riley-Smith, Cambridge
1121 Andy Hornby looks more nervous than the rest of them. He insists he listened to warning voices. He is asked about a quote from a former HBOS risk specialist who claims he was subject to "threatening behaviour" when he raised concerns with top executives. Mr Hornby says he does not recognise that version of events. Lord Stevenson denies concerns that the bank was "going too fast" were not recorded in board meeting minutes.
"Sir Fred seems to be moving from defence to attack. He will protect his back all the way down this slippy slope." Dave Harle, Doncaster
1116 Andy Hornby is quizzed on whether, as a former retailer, he had enough experience to run a bank. He says he had been on the HBOS board for seven years and he was surrounded by experienced colleagues.
"We all enjoyed our interest free credit card deals, cheap credit for cars and easy mortgages. These guys made it happen and it was unsustainable and we all need to take our share of blame." Phil Grimason, Dublin
1113 Andy Hornby says the bank did take evasive action, such as reducing liquidilty, when he took over as HBOS chief executive, as he could see trouble coming. But he admits that, like others, did not forsee the complete closure of wholesale banking markets. And he wishes the bank had done more to prepare for the crisis.
"I'm beginning to wonder what the point of this questioning is? It appears that all the MPs are trying to do is make headlines out of the bankers rather than using it as an opportunity to seek useful answers that can help tackle the economic situation." James, Rugby
1109 The four men seem to be holding up well to the grilling. They appear well within their comfort zones as they are quizzed about their credentials or qualifications to run a bank in the first place. The wince-inducing mass apology at the start of the session is a fast-fading memory.
1105 Tory MP Sir Peter Viggers is grilling Sir Fred Goodwin about whether taxpayers' money was invested in RBS with the appropriate safeguards and checks. It was, insists the former RBS chief, but there was not time for the normal process of "due diligence".
1104 "Maybe I've missed it but I have yet to hear any questions that try to get to the heart of the matter of where we are today." Tim Purdon, Kilmarnock
"Andy Hornby says he doesn't feel 'personally culpable' for what happened as he'd only recently taken over as chief executive when the storm hit. So by rights he can't take any credit for the good stuff that happened before and therefore doesn't deserve any bonus." Anonymous, Edinburgh
"This is not a negotiation it is a drive-by shooting". That is what Sir Fred Goodwin, ex-RBS boss, is reported to have said about talks with the government on their bail-out plan. The dapper Sir Fred, who is giving a very measured performance, tells MPs that was a private comment, but the deal was done very quickly and under a lot of pressure."It was very clear to everyone that it had to happen there and then," he adds. Lord Stevenson, former chairman of HBOS who is given an equally calm and deliberate performance, says there was "not much negotiation" with the government.
"John Mann's questioning of Andy Hornby was gratuitous. It had all the sophistication of a public flogging." Shane Wexford, Stoke-on-Trent
1057 John McFall asks Andy Hornby whether he was expressing sympathy because his PR advisers had told him to do so. Mr Hornby repeats his apology and says the bank takes full responsibility.
1054 John Mann gets stuck into Sir Fred Goodwin, the ex-RBS chief, now. He asks if Sir Fred has a moral compass. Sir Fred again as he defends his integrity and repeats his apologies.
"Some of this questioning is very childish. How executives choose to invest their pensions and mistaken change of address forms are hardly constructive issues." Pete, Manchester
"These bankers seem to think that apologies will absolve them of blame - they don't fully realise or care how their selfish actions have compromised the finances of the whole country." Jonathan Guy, Warwick
Andy Hornby says he is still being paid £60,000 a month by HBOS but the arrangement will only last another three months. Looking contrite, he insists he is not being rewarded for failure as he has lost money since the bank hit the buffers. He says he invested all his bonuses in the bank's shares.
1049 Andy Hornby, ex-HBOS boss is getting a bit testy after the Jobseekers' Allowance exchange. He has now been quizzed by MP Mann, a customer of the bank, on the morale of staff, which Mr Mann says is "in meltdown". Mr Hornby says it would be "extraordinary" if there had not been some demotivation but he believed morale would improve over the next two years.
1047 From BBC Political Editor Nick Robinson:
Perhaps sensing that the bankers are finding this too easy Labour MP John Mann's deploying heavy sarcasm in taking on Fred "the Shred" Goodwin. "How much worse could it have been" - he asked - "if you'd not been in charge". He's now embarrassed Andy Hornby by asking him the level of the JSA which many of his former staff will be receiving. He had to have it pointed out that this was the new name for the dole.
Sir Fred's pension, worth a reported £8m, is not linked to the share value of RBS, he reveals. It would not be allowed under the rules apparently. However he says he has lost £5m due to RBS's collapsing share price.
"I did once sympathise with these bankers, feeling that they were just the brunt of the media and the public's wrath but their lack of remorse for careless spending has changed my mind." Robbie Newton, Edinburgh
1042 Andy Hornby, ex-HBOS boss, says he does not feel "personally culpable" for what happened as he had only recently taken over as chief executive when the storm hit. Sir Fred Goodwin, ex-RBS boss, says he does take responsibility.
1039 The due diligence process to assess the economic health of ABN Amro was done six months before the takeover by RBS, says Sir Tom McKillop. But there had been a "financial earthquake" in the intervening months, points out an incredulous committee chairman John McFall.
The heat is on HBOS (Halifax/Bank of Scotland) now. Andy Hornby, its former chief executive, insists it did have sufficient controls via non-executive directors on risks being taken by bank executives. Lord Stevenson, ex-chief executive of HBOS, says the bank had "very elaborate systems of risk management and stress-testing" and the board was "all over" the risks being taken. But he says: "We failed to consider some of the extreme scenarios that actually happened".
"While apologies wont fix anything now, at least these guys are willing to say 'we made a mistake' and 'sorry', even if they thought it was a good idea at the time." Jonathan Hewitt, Newcastle
1035 "This little spot of public humiliation will be over shortly, and then they will probably pop off to their yachts in Monaco for cocktails this evening." Nick Hawkins, Oxford
1035 From BBC Political Editor Nick Robinson:
The first flash of the anger felt by many watching at home. The Tory MP Michael Fallon told Sir Tom McKillop - the former chairman of Royal Bank of Scotland - that he'd "destroyed a great bank and cost the taxpayer £20 billion". I can't help noticing that the bankers are looking more not less relaxed.
"Sir Fred seemed to be excusing bonus culture as a method of retaining staff & stopping 'churn'" Emalyse, UK
1030 Sir Tom insists ABN AMRO only cost £10bn. That's OK then! He says: "The bulk of what we paid for ABN Amro will be written off as goodwill and we paid about £10bn". At the time, he repeats, it seemed like a good deal. The whole board agreed to it and it was not driven by Sir Fred Goodwin alone, says Sir Tom, and it was given FSA approval.
Jaw dropping stuff. Sir Tom McKillop, former Royal Bank of Scotland (which includes NatWest) chairman, says it was a "bad mistake" that RBS bought Dutch bank ABN Amro, which was, lest we forget, a £50bn deal. At the time it did not seem such a bad idea, he adds.
1027 "Why are these men being treated so gently. Will someone please ask the difficult questions of them?" Tony Grace, Southampton
"'Have your banks lived up to the definition of a bank?' If they can't answer that, what is the point of anything else?" John Rogers, Bristol
1023 Andy Hornby is tackled about his £940,000 salary, which Mr McFall gives him a nice comfort zone. He agrees.
1022 Sir Fred Goodwin says it is a "highly competitive market" and the big bonus culture was imported from the US. This was a "source of angst" for British banks, he tells the MPs, but they did not know what to do about it.
How can bankers justify bonuses of ten times their salary? Lord Stevenson says HBOS was not paying that kind of ratio and is moving towards a system that rewarded long-term performance. Tom McKillop also rejects the "ten times your salary" equation. Bonuses at RBS were far more modest, he insists. But the bonus culture was imported into High Street banks from the investment banks, he adds.
1019 "Sorry is just not good enough, give the bonuses back. We should not reward failure." Walter Biggin, Perthshire
"These bankers have at least said 'sorry' for the collapse of the global economy. Well, that's all OK then..." Steve Fouch, Medway
1016 From BBC Political Editor Nick Robinson: A split has emerged. A white faced, nervy looking Andy Hornby - the former chief exec of HBOS - said in a quivering voice that bonuses were "not rewarding the right type of behaviour". He defended himself by saying that he'd not taken his bonus in cash but in shares and had lost more in those than he gained in money. Sir Fred Goodwin who told us simply that he was paid £1.6m last year was not really challenged on this issue. The bankers should feel that they've escaped pretty easily on this.
1014 From BBC Political Editor Nick Robinson:
The scripted apologies are over. The first sign of frustration from MPs followed when the witnesses struggled to answer the straight question from the Treasury Committee Chairman. Had their banks lived up to the definition of a bank ie an institution that safeguarded customer's money? Their answers ranged from "er" to "mmm" to "we did not forsee with enough clarity…."
1011 Lord Stevenson, former HBOS chairman, says he can "understand why" people are concerned about short-term cash bonuses. Former RBS chairman Tom McKillop says current events should prompt a review of bonus policy across the board - but it cannot be carried out in a "piecemeal way".
1010 "I've worked for RBS for 26 years, Fred turned us from an admired institution to a laughing stock." Anonymous, London
Bonuses now. Sir Fred Goodwin - "Fred the shred" as he is known by many newspapers - says he did not take a bonus in 2008. He says he and his colleagues have made considerable losses in the past year as they, like Andy Hornby formerly of HBOS, had invested their bonuses in bank shares. Mr Hornby criticises bonuses for short term performance, saying annual cash bonuses should be tied into longer term share performance, perhaps two or three years.
1009 They are asked by committee chairman John McFall on whether they lived up to the definition of a bank that they are responsible for the safekeeping of people's money. After a lot of talking around the subject, Mr McFall decides they did not.
1006 From BBC Political Editor Nick Robinson:
So "sorry" isn't the hardest word. Each of the former bankers in turn have, predictably enough, said sorry. Each claimed that they had apologised before already - although that was to shareholders and not the public. Interesting that Lord Stevenson - the most political of the bunch - anticipated what will surely be another line of questioning on whether they've gained whilst we've suffered the pain by saying that "our shareholders - all of us - have lost a great deal of money".
1003 Sir Fred Goodwin says they did not get the scale and speed of the downturn. Everyone thought it was going to turn "at some point" but everyone was taken by surprise by the speed of it, he tells the MPs.
1002 Did they think low interest rates and favourable economic conditions would last forever. Lord Stevenson chooses his words carefully. He did not "slavishly worship at that doctrine". Three years ago HBOS decided to lower their share of the housing market out of caution. But, he adds, the prevailing view was "bound to have an influence on us."
This is starting to look like a show trial. All four men have now offered sincere apologies. Former RBS chief Sir Fred "Goodwin said he wanted to offer a "profound and unqualified apology for all the distress that's been caused."
We're off. Lord Stevenson is first to be given the opportunity to apologise by committee chairman John McFall. He says: "We are profoundly and I think unreservedly sorry at the turn of events."
"I would ask whether they're sick of being made scapegoats for an entire nation's folly and addiction to debt." Pete, Cheshire
0952 The four men - former HBOS chief executive Andy Hornby, his former chairman Lord Stevenson, former RBS CEO Sir Fred Goodwin and his former chairman Sir Tom McKillop - have just filed into the Thatcher Room to face the panel of MPs. They are swapping small talk and pouring each other glasses of water. We should be under way any second now.
"They should all be stripped of their knighthoods and made to pay back all bonuses paid to them during the period in question." Robert Taylor, London
Committee chairman, Labour MP John McFall, told the BBC News Channel he wants to find out "what went wrong" and how
these "once proud institutions have been brought to their knees and what lessons we can learn for the future." He is also expected to quiz them about how they justify their bonuses.
0935 Welcome to our live text coverage of the Treasury Select Committee. This morning, the four men who presided over the rise and spectacular fall of two of Britain's biggest banks will be questioned for two hours or more on their role in Britain's financial crisis. The four - until recently senior executives at the Royal Bank of Scotland and HBOS - will face a panel of senior MPs in the Thatcher Room at Westminster's Protcullis House. The session is due to start at about 0945.