Wednesday, February 01, 2012

Ex- RBS chief loses knighthood

You could call it British PM David Cameron's concession to populism. Former RBS chief Fred Goodwin is to be stripped of his knighthood on account of the losses inflicted on it towards the end of his tenure. FT reports:

The man knighted in 2004 for his “services to banking” presided over a breakneck acquisition spree that ultimately led to the collapse of RBS in 2008; he then courted further controversy by initially refusing to give back any of his £16.9m pension pot.....his tenure ended with RBS recording a loss of £24bn – the largest in British corporate history – and being forced into the world’s biggest bank bail-out, with the injection of £45bn of government equity.
 Goodwin has not been convicted for any wrongdoing nor has he invited any regulatory action. But he has become something of a lightning rod for anger against bankers, not least because of his failure to express any sort of regret in public. 
Is the anger against bankers itself overdone? Schumpeter hints this might be so and points to the good things one associates with bankers:
Great financial centres have often been great artistic centres—from Florence in the Renaissance to Amsterdam in the 17th century to London and New York today. Countries that have chased away the moneylenders have been artistic deserts. Where would New York’s SoHo be without Wall Street? Or the great American universities without the flow of gold into their coffers?
 Well, yes. But the man in the street does think that there is something wrong with bankers wrecking the world economy and walking away with huge bonuses. Banking needs drastic changes. If demonising bankers is the only way to get them to embrace change, it's hard to complain about the current rage against the likes of Goodwin. 


Anonymous said...

Just a small correction: I think you mean the British PM David Cameron. James Cameron makes movies!

T T Ram Mohan said...

Oops!Thanks for letting me know... I have made the correction.

-TTR said...