Sketch: Arrow points to defective part of capitalism

Overlooked by the portrait of William Pitt addressing MPs, which dominates Committee Room 6 in the Palace of Westminster, something historic is happening – almost without publicity.

As with the Leveson Inquiry, the questioning is led by a barrister; but unlike it, there are a mere handful of spectators to watch it happening. And this is as important; perhaps in the long run even more so.

True, some of the exchanges between key figures from HBOS and the panel of the Commission on Banking Standards set up by Andrew Tyrie, which was yesterday delving into the financial services megalith's catastrophic collapse, can seem as mysteriously arcane as the one between the alien and the French scientist, played by François Truffaut, at the end of Close Encounters of the Third Kind.

But that's hardly surprising. The panel trying to unpick the true causes of the crash is formidable by any standards, as far removed from your run-of-the-mill Select Committee as its possible to be: a former Cabinet Secretary, Lord Turnbull, Tyrie, himself the very clever and independent-minded Tory Treasury Select Committee chairman, and – as Turnbull put it – the "appropriately named" young David Quest, already one of the country's leading banking lawyers.

What's more, all three have read, and understood, 19 ring-folders bulging with documents, a lot of them hyper-technical.

Some of it is all too easy to understand. Like the whistleblower, Paul Moore, who was sacked as Head of Group Regulatory Risk after trying to warn HBOS of the dangers of their relentless pursuit of colossal short-term profits.

Describing the dysfunctional relationship between his role and the sales-driven culture of the company, he recalled that he had been told by Jo Dawson, the woman who would succeed him: "I'm warning you. Don't make an effing enemy of me."

In his attempt to assess the true risks, not only to customers who didn't understand them but therefore to the bank itself, he encountered "threatening behaviours" of colleagues who hid pieces of his paper, didn't turn up to meetings, were rude and swore at people in his team.

He plugged his call for a change to the "fiduciary duties" in company law encouraging short-termism. And for those monitoring risk to report only to non-executive directors. "When you oversell credit, you always end up with some credit loss," he said. Moreover, the linking of employees pay to sales targets "were at the heart of this".

The panel asked Ms Dawson about the period after 2005. Unsurprisingly, she was more hesitant in her evidence. But she did agree with Turnbull that, despite not being part of the corporate division when it was claiming that it was pursuing a "conservative" approach to risk, she too had heard the talk, in Turnbull's masterly understatement, that it was just the place to put an "adventurous proposition" and get a "very quick decision".

A generation ago, the great Sunday Times journalist Murray Sayle said there were two types of investigative story: We Name The Guilty Men and Arrow Points To Defective Part.

This inquiry falls in the latter category – as Turnbull said, to try to find how it was all "allowed to happen".

But these are the defective parts of capitalism itself. And there may even be a few guilty men thrown in.

Spread the privilege...

When David Cameron announced that he wanted to "spread privilege" last month, this Sketch suggested it sounded "like something Fortnum and Mason might patent". The upmarket store was clearly reading, because yesterday it launched a Plum & Claret Privilege Spread – designed for "aristocrats and artisans alike".