Tuesday, 31 January 2012

Fred Goodwin's lost knighthood - a victory for the mob but the City is on notice it's accountable to you and me

I won’t go as far as to say I felt sorry for Fred Goodwin on hearing the news the disgraced former Royal Bank of Scotland chief executive had been stripped of his knighthood.
But it’s impossible to escape the conclusion he has been sacrificed to appease the blood lust of the baying mob.
While he hasn’t been found guilty of a crime – the usual reason for the withdrawal of an honour – Goodwin was heavily censured in the official inquiry into the collapse of the bank which required a £45 billion state bailout.
However by snatching back the bauble, the whole honours system has been demeaned rather than enhanced. It smacks of Stalinist rewriting of history.
The fault is with those who bought into the Goodwin myth – the board and institutional shareholders – who couldn’t rein in the man’s expansion mania once he had nabbed NatWest.
To its eternal discredit the Labour government which knighted Goodwin for services to banking in 2004 encouraged the banker and his ilk in the financial services industry’s rush to the precipice a few years later.
Taken together with the flak directed at current RBS chief executive Stephen Hester which led him to waive his £1 million bonus, we are witnessing the swing of the public opinion pendulum against all things City of London.
It’s been a long time coming and is an expression of the pain being felt in the country by the economic squeeze.
Although the greed and recklessness of the banking community precipitated the 2008 financial crisis, bankers have been judged to have got away scot-free.
It seems incompetence and negligence are charges that can brought against, say, train drivers but not bankers who cost taxpayers billions and destroy others’ livelihoods – if not lives – while continuing to enjoy their fat salaries and bonuses.
The playing field will never be level. But the City has been put on notice; it cannot escape accountability from its paymasters, ultimately you and me.

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