The session at the parliamentary commission on banking standards was Sir James’ first appearance before MPs and peers since the collapse of the bank.
“I was horrified and deeply upset by what happened,” he said. “I played a major part in building a business that subsequently failed. It would be wrong to disassociate myself from what happened in the end.”
He conceded that he was unlikely to get FSA approval for a job in finance in the future. “I don’t expect that if I applied I would be approved, no, given my history,” he said.
His successor Andy Hornby said the bank’s loans were too concentrated in commercial real estate, and it failed because they studied risk in too much detail and missed the broader picture.