Bankers take the heat - but are hearings of any use? Treasury Select Committee under spotlight IN ASSOCIATION WITH Rensburg Sheppards.

Byline: BY HOLLY WILLIAMS Daily Post Correspondent

LORD MYNERS'S grillin, at the hands of the Treasury Select Committee last week, marked no less than the 12th meeting so far this year into the banking crisis by the cross-party group of MPs.

The latest inquest into disgraced former Royal Bank of Scotland boss Sir Fred Goodwin's pension pot was followed just days later by another high-profile session, this time with the Chancellor in the hot seat.

Commons committee members - and its chairman, John McFall, in particular - have become familiar household faces over the past year as they have taken the country's top bankers, regulators and Treasury figures to task.

The committee has stormed through a series of showdowns since the collapse of Northern Rock, using pithy put-downs to maximum effect.

In a bruising session over the Northern Rock failure, it famously accused the Financial Services Authority of being "asleep at the wheel", while it said former Bank of England deputy Governor Sir John Gieve had been "in the back shop while there was a mugging out front".

But as the number of its hearings mount into double digits since the start of the year alone, there is a creeping sense of committee meeting fatigue surrounding the banking crisis.

In the past week alone, there have been four banking crisis hearings - on one day there was the Lord Myners session in the Commons, while, just a few hours later, over in Parliament, a Lords Committee was conducting its separate inquiry with a weary looking panel of banking chiefs once more in the docks. A Scottish Affairs Committee, too, is conducting its own probe into the crisis.

While the often combative hearings are regular headlinegrabbers, there are mounting concerns that these public interrogations are mere grandstanding opportunities that detract from the real issue - the near-collapse of the entire banking system.

Select committees have been in existence for decades and, in the case of the Treasury Committee, serves to scrutinise the workings and policy of the Treasury, HM Revenue & Customs, as well as associated bodies such as the Bank of England and the FSA.

Current grumblings aside, they are seen as a vital opportunity for public debate. This is a view held certainly in political circles, but also among the wider general public, judging by recent responses. The committee asked the general public to submit questions for the first time last November as it kicked off its banking crisis inquiry, and it was inundated.

More than 5,000 people wrote in with questions for the session with Bank of England Governor Mervyn King, Alistair Darling and FSA chairman Lord Turner.

Political think-tank Policy Exchange said, for all the hot air, the committee is airing important issues in the public domain.

"The committee has a very important role to play and people are listening to their output," said Helen Thomas, a research fellow at Policy Exchange's economics unit. "The criticism that is often levelled against them is that it's a forum just for members to throw their weight around, but while maybe there's around 40% that's grandstanding, there's still 60% of vital public debate."

The committee membership is chosen by party whips - as is the chairman - and must reflect the majority in Parliament. They must have a minimum of 11 members, although the Treasury Committee currently has 14.

While membership can be fairly fluid, there is no set deadline for periodical reshuffles and the chairman is elected to serve for four years, with possible reelection for another four years.

Mr McFall is in his last year of tenure, having already been reelected once, in October, 2005. The committee members choose the topics and then produce a report, which is made publicly available, but also sent directly to the Treasury, alongside the Bank and FSA. Once a report is published, the Government has two months to respond.

With many witness sessions and reams of written evidence under its belt, the committee is hoping to produce its report on the banking crisis in April, before the Budget. The question increasingly being asked is whether all this talk will produce results..

But, in the case of the private equity session, the witnesses gave as good as they got, with slick PR coaching helping them to field tough questioning.

The committee has, however, succeeded in claiming a number of scalps. Peter Linthwaite, chief executive of the British Venture Capital Association, quit last June, soon after a less-than-impressive performance at a hearing.

More recently, former HBOS head Sir James Crosby stepped down from his role as deputy chairman of the FSA, following allegations from an HBOS whistleblower that were dramatically aired in a committee hearing.

This is vital public debate

CAPTION(S):

From left: Mridul Hedge, Treasury Financial Services Secretary Lord Myners and Nikhil Rathi give evidence to the Treasury Committee inquiry into the banking crisis at Portcullis House, London Committee chairman John Mc Fall; Committee chairman John McFall