Shredded, Inside RBS, the Bank that Broke Britain
In the chequered history of world banking, Fred Goodwin, or Sir Fred as he was once known in his native Scotland, is a rarity.
Under his tenure, the Royal Bank of Scotland became the world’s biggest bank but, when the fair economic wind changed dramatically, its stock lost 91% of its value in a matter of months.
<I>Shredded, Inside RBS, the Bank that Broke Britain<$>, is the story of how a financial institution with a buffoon at the helm managed to fool the world that its growing portfolio of acquisitions – 27 in Goodwin’s time – was the same as growth.
It wasn’t, which is why the British Government, in a day, was forced to bail out its bigger banks, after the Lehman Brothers failure, with £50 billion of equity capital support, £250 billion credit guarantee scheme and £200 billion special liquidity scheme.
There are many parallels between the running of the RBS and Anglo Irish Bank, and in Fraser’s brilliant and 435 page account, to date the most definitive guide to the biggest global financial catastrophe of our time, the alarm bells are ringing long before someone sits up and takes notice.
There are many culprits – lazy boards of management, weak regulators, unconscionable bankers – but the net effect of suicidal risk management and irresponsible growth fuelled by fear and paranoia is a tax payer burdened with debt for decades to come.
“With their usual sense of entitlement,” Fraser concludes, “the bankers were looking to the state to save them and, in this instance, the UK state could hardly have been more obliging.”
Goodwin, the rear half of a pantomime horse, constructed an empire and a reputation on the strength of the RBS’s celebrated acquisition of NatWest, and surrounded himself, as megalomaniacs do, with obsequious arse lickers.
Known as Fred the Shred because he mimicked fellow Scot Alex Ferguson’s hairdryer treatment of underlings who messed up, though Ferguson was usually justified, Goodwin had more style than substance, instanced by displaying a fake sword from the film Braveheart in his office.
Even when RBS was staring into the abyss, that is to say its customers, not Goodwin or his hapless Chairman Tom Mc Killop, busy feathering their nests with massive financial pay offs , the culture, from Goodwin down, was one of abject denial.
Goodwin continued to jet off to the Formula One Grand Prix, with the bank paying its global ambassadors like Jackie Stewart £3 million a year, whilst the RBS share price continued to plunge.
Goodwin and McKillop were like the young men in the iconic 1914 photograph, Young Farmers, by August Sander, strolling to a dance on the eve of their obliteration.<I> Shredded, Inside RBS, the Bank that Broke Britain<$>, is an exhaustive, no holds barred account of a seismic implosion by a writer with a forensic understanding of his metier.