Tuesday, January 31

Snake In The Grass

And how far Fred Goodwin has fallen.

The British have been itching to blame the financial mess on somebody, anybody, and so Goodwin stripped of his Knighthood.  Goodwin , of course, the Chief Executive of Royal Bank of Scotland when the shit hit the fan.

From 2000 to 20008, Goodwin grew RBS into the world's largest company with assets of nearly £2 trillion, greater than British GDP.  He did so by aggressive lending and a large exposure to the US sub-prime market. A 2% reduction of the loan portfolio's value brought the house down, ka-BOOM.

In October 2008, Goodwin resigned as Chief Exec - a month before RBS announced a yearly loss of £24.1 billion, the largest annual loss in UK corporate history.  RBS nationalised with £45 billion of taxpayer and my money.  Adding insult to injury, Sir Fred's retirement package : £12 million.  In fairness, he will never work again. One hopes. (In another RBS pr stinker, RBS bankers received £950 million of bonuses in 2011 despite losing £1.1 billion for the year)

Personally , I think Goodwin should be allowed to keep his Knighthood. Goodwin made some bad calls, none worse than buying ABN AMRO at the peak of the market, but he did not break the law. He is not to blame for the UK recession nor the global financial collapse.