We’re having a parliamentary inquiry into the banking scandal rather than a judge-led one. Based on what we’ve seen from previous parliamentary committees, we are unlikely to be much clearer by the end of it. As Mary Riddell put it:
Observing the Treasury select committee trying to pin down Bob Diamond on Libor was like watching a 4B chemistry set attempting to hunt down the Higgs boson.
Parliamentary inquiries are often rambling and unfocused. Just look at the phone-hacking hearings; a classic of the genre.
There are three reasons for this.
Firstly, most MPs lack forensic questioning skills. The sort of questions you need to ask to find out what really happened in a media or banking scandal are very different from those you use to score points in the House of Commons.
Secondly, MPs play to the gallery. They want to make themselves look good so they try to be clever, making silly jokes and calling people rude names. This might look good on telly and give otherwise unknown MPs their fifteen minutes of fame but it won’t get anywhere near the truth about the Libor scandal or the wider malaise of our banking industry.
Thirdly, and most importantly, they don’t work as a team. Their places on the committee are allocated along party lines and each MP comes to the table with his or her own agenda. They queue to ask questions and, because they are so busy rehearsing their own points, they rarely listen to what went before. The questioning is therefore disjointed. Even when the witness is facing tough questions, the baton is soon passed to another MP who takes the questioning off in a different direction, allowing the witness to wriggle off the hook. The lack of a team approach also means that the MPs, if they prepare for the hearings at all, do so individually. They therefore rarely mount a co-ordinated assault on the defences of those up before them.
Although it might look unfair, with the witness outnumbered by a horseshoe of MPs, parliamentary committee hearings are really a series of short, unfocused one-to-one interviews. They are a bit like those martial arts films where a dozen baddies attack the hero one at a time, allowing him to see off each one in turn.
Set against this fragmented and unfocused group of MPs will be some of shrewdest people in the banking industry. You don’t get to the top of an investment bank without being very bright and politically astute. Razor-sharp, expert in the subject matter and coached by the best lawyers, PR specialists and media trainers money can buy, they will be formidable opponents.
The whole thing will probably be a walkover.