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Do we want all the skeletons out of the closet?

As we enter audit season many of the UK’s larger financial establishments will be sweating as they finally reveal how bad it really is, and more importantly, how stupid they were.

As we all wait for the end of year results, which could be delayed thanks to auditors simply refusing to sign off the books, some MPs are calling for more transparency with regard to the banks which have dragged the economy into a recession.

Everyone is itching to see the dirty washing of the likes of the former HBOS, Barclays, RBS and Lloyds TSB; write offs, bailouts and screw-ups aplenty. RBS has already admitted it could have lost as much as £28bn last year, but how much have the rest lost?

Obviously, the big banks have to reveal their balance sheets, but MPs are pushing to learn more about the nationalised and part-nationalised banks – more about investments, what is on the balance sheets and where all the monies are going.

The question is – should we know everything?

One the one hand the men at the top have well and truly proved that they can be prone to some whopping mistakes, with our money. We are bailing them out – we are pumping money into them so we should be privy to where the money is going and what these guys are doing with it. The directors have been naughty and this is their punishment.

But on the other hand, as soon as RBS gave us some insight in to what they had to show us it all went a bit pear-shaped. The bank lost 66 per cent of its value in fewer than 12 hours and has continued to hover a few pence above bankruptcy all week. What would have happened if we had learnt about the entire workings of the bank, from the bottom up?

Also, if we do learn that the big banks have invested badly and are sitting on billions of bad assets, can we afford the clean-up? There are quiet whispers around the finance world this week asking can we afford to add RBS to the casualty list of Bradford & Bingley and Northern Rock? The answer? Maybe not.

Unfortunately, we need these monsters of finance. They hold our money and our economy in their hands. We have seen what happens if a bank is left to die with Lehman Brothers – whatever the end of year results say we have to make sure the banks, however stupid they have been, survive in some form.

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