I’m not sure what to make of this Sir and now not so Sir Fred Goodwin.
He was clearly up to all sorts that he shouldn’t have been and RBS became a disaster area under his tenure, for which we are all still paying a price. But it wasn’t the only disaster area. And he wasn’t alone in helping create it.
So there are still plenty of bankers, not to mention regulators, who are wandering around the world from board to board, knighthoods and peerages and enormous pay packages largely intact. And before anyone shouts ‘what about the politicians?’ they are at least accountable at the ballot box. Gordon Brown was PM, he is no more. The banking crisis was not the only reason, but it was one of them.
So are we really to say that because some faceless group called the forfeiture committee decides Fred is to lose his K now we can all carry on as before? Is that it?
By wanting more, I don’t mean more humiliation for more banking knights and peers of the realm. I mean a proper investigation and explanation of all that happened.
In my new and varied life I do quite a lot of speaking to business organisations, including banks. And yes, in the spirit of openness, I am often handsomely paid for the wit, wisdom and insight I impart.
One point I have been making is that the banks have not engaged in a process of reckoning and explanation about what happened. Perhaps it is too painful. Perhaps they just feel they have to put the past behind them and get on with the job of sorting out the mess. But it won’t work. The disaster was too big and it was too costly. There has to be, surely, a proper reckoning of what went wrong. And that requires more than a bit more humiliation for the man who, in becoming a symbol of what went wrong, also became a scapegoat.
The fact that he is now Mr Goodwin and not Sir Fred ultimately affects hardly anyone but him. I find the whole honours system so ludicrous anyway – in my mind it is more of a punishment to have all the silly letters than to lose them, but on this I realise I am in a minority.
The serious point is that the humiliation does not put right what went wrong. It doesn’t help explain why the disaster occurred and nor in truth have any of the reports and inquiries so far.
We have had Chilcot for Iraq. Leveson for phonehacking. Surely there has to be a similar investigation into what went wrong in the banking disaster. Mr Goodwin would not be the only witness who would find such an inquiry testing indeed.
In being the scapegoat he has unwittingly done his former colleagues a huge favour. But if the stripping of his honour is the only moment of reckoning for what went wrong, then I think intelligent outsiders are entitled to look in on our country and say ‘what an odd little place it is.’
Ps. Ed v Dave so far this week. Played 2 won 2.
Completely agree with you both on GOODWIN and PMQ`s…They are beating you on spin Alastair by shredding Fred the same day as the Euro `u`turn
I doubt he feels the loss in any way, isn’t he still on a third of a million quid a year pension? I’m absolutely positive that out of the two he’d prefer to lose the letters over the figures.
You’re right, there should be a proper inquiry, AC – otherwise nothing in terms of regulation by the FSA, Bank of England etc is going to change. The government talks about ‘reforming’ the regulatory system, while blaming Labour for its weakness, but until they’ve pinpointed why it didn’t work, they can’t hope to make it more effective.
And you’re also right that the bankers have simply brushed off the crisis – far from being grateful for the public bailout, they’ve said – literally, on Evan Davis’s Bottom Line programme sometime last year – get over it, it’s time to move on.
But I still find the baying mob movement against Hester and Goodwin pretty distasteful. Hester was brought in to do a specific rescue job and by all accounts is doing it pretty well. He is responsible to his Board of Directors, and they are collectively responsible for the bank. I don’t feel sorry for Goodwin, but as you point out, he wasn’t alone in his irresponsible bid for world domination, and again, collective responsibility for what the bank did rested with the Board, not him alone.
There is far too much of this public pillorying of individuals, often for their own purposes. Boris, for example – his nakedly populist call for Hester’s bonus to be revoked was entirely due to his wish to be re-elected. Bankers are paid way too much, but so are lots of others – including people like Boris who is paid something like half a million a year for his Telegraph column. It’s actually the media columnists, who live by polemic and opinion, who are paid a great deal and are responsible for nothing, who annoy me most.
The knighthood was bestowed for services rendered to that point. Whether it should have been and whether the system is outdated or not isn’t really relevant imhoo.
Revoking it is spiteful and I don’t believe for one minute that it has been done for honest reasons, it’s down to its being a Labour bestowal.
Are we going to revoke the Sir-ships bestowed on John Major and Norman Lamont i.r.o. Black Wednesday etc? Has the idea ever even been mooted?
As has been said already here he should have kept his bauble and had his pension reduced; WTH deserves, needs or will spend two thirds of a million pounds per year?
Still, at least the Sham has been thwarted in hoping for a popular high noon precedent with Stephen Hester and RBS that he could have then exploited on every other public service contract of employment (to even greater extent than has occurred already re pensions) and responded with ‘Yahboosuckers – even stephens’ at any outcry.
At an interest rate of 3%, we are paying £82,000,000 interest per day on the £1 billion national debt, plus the annual deficit is £119,000,000,000. The nonsensical waste of energy being expended on a few bankers taking a £1 million bonus is designed purely to distract the public from understanding the true position of the country.
For most of Labour’s 13 years the annual buget would be all about plus or minus £2 or £3 billion on or off taxation here and there.(40 days interest payments nowadays!). The public have just not caught on to the size of the rapidly increasing deficit and the implications for generations to come. It is not in the interest of any politicians to stress and underline the truth. The horses would be frightened and spending would shrink and the economy with it.
Politicians will soon realise that all the nonsense about government control of (non nationalised company) boardrooms is a distraction. Financial services and banking need regulation tightened: manufacturing and shops do not!
Cameron has been aweful over the last few weeks. Judgement poor on many things.
But Al if you thought that the sight of the Opposition front bench, stunned and silent when repeatedly asked whether they would support the “cap” tonight, represented a win for Red Ed, then you need to change your telly! The fact is that his TV station tours need to occur on the subject of substantive issues, not bandwagon jumping like that of (Sir) Fred.
Those pictures of them all dumstruck in parliament today will tell the story the public will judge Ed’s Labour party by.
The timing as diversion – scapegoat – is clear.
Ed. has done well through this, on Europe too.
An enquiry into this is appropriate, mostly to address disparity and injustice, but I am being blithly sunny in my rosy optimism in thinking and feeling that change may arise from light being shone into the rarified existance of those in such positions.
I am in a land whose language I do not speak and whose ways I can not fathom.
A basic annual salary equivalent to what an average salary would apport in 46 years – so a bonus is required to multiply this or there is just no incentive to do the job. Perks and security in life flow with this position too.
Whilst the provision for disabled children is being cut,
today that is the debate in the Commons – those who speak of us ll being in this together.
Burning rage at this? Remove a label from one man and not his millions?
How on earth can we be so far back to Thatcher’s ’80’s already with these Tories?
Variations on a Theme, I suppose. not of Paganini – more a Danse Macabre played on the fiddle whilst morality burns.
Oooooh mea culpa; he’ll be paying tax on his £703k pa so he doesn’t have quite so much to dispose of every year.
I daresay the Sham’s accountants would suggest he takes up residence somewhere like Monaco.
Point of information: Major and Lamont were “gonged” after the events of Black Wednesday.
The honours system is corrupt and should be discontinued.
Fred however should be left alone. He was encouraged by all around him to drive the business in the direction he did and the regulators let him.
An inquiry into the events would take ten years, like Blair’s Bloody Sunday effort, and have nothing but a line in the history books when it reported.
Are you shadow boxing?
Good article. I also liked what Alistair Darling had to say on the subject:
http://www.youtube.com/watch?v=fZf9Pg4He4Q
What caused the crash was moral hazard. Because banks going down would take depositors/voters with them, we have deposit insurance. Like our other types of government insurance it is a ponzi scheme, the govt don’t have the money invested it they just rely on taxpayers for it. If all the banks go down, the government can’t pay out. So they must always take the less costly route of bailing out the banks.
The banks always knew all this, so they knew they could borrow and gamble more due to the taxpayer backing – if they win they win, if they lose the taxpayer loses. Its called “privatising profits, socialising losses”.
The best solution I’ve heard comes from Andrew Lilico, and is supported by Mervyn King and Douglas Carsdale. Storage accounts – force banks to offer safe accounts that the depositor owns, not them, and that they cannot lend out, only invest in safe assets like gilts.
This is how the Trustee Savings Banks worked for over a century.
Then if there is a crash, our money is safe and we can just laugh at all the bankers getting their ferraris reposessed.
The taunts by the PM on benefit cap was simply theatre and school boy antics and if you are unable to recognise that then you appear simply naive.
Now let us explore how simplistic the argument is:
Do you realise that in a city like London, that rent for a family in a 3 bedroom house in Tooting is about £1,600 without taking into account Child Benefits and Income support, if housing benefits are covered, that is £19,000 per annum. (In Streatham its closer to £2,000 = £24,000)
Child benefit will come to about £1,700 for the three kids, leaving the family with less than £6,000 to leave on taking into account the maximum cap.
So is it your argument that the family of 5 should live on less that £6,000 a year because they happen to live in London?
I only wish the electorate would be more discerning rather than fall for the easy narration that these scroungers earn more than those who work or are better off than them.
The perverse implication of the policy as i understand it is that there would be a massive upheaval of people from London to be within the £26,000 cap.
For equal measure, following up my response to yours, please refer to this: “But let’s just look at the facts here. The government’s own figures indicate that 100,000 children will be pushed below poverty line on account of these changes.Even communities secretary Eric Pickles privately admits that 20,000 will be made homeless by the proposals. Far from saving any money, local government will actually end up out of pocket.
In other words, what we have here is a half-arsed, spiteful and misguided piece of legislation, designed to cut living standards of some of Britain’s poorest people (including many of the disabled) to score brownie points with the Daily Mail.” http://www.davidosler.com/2012/01/welfare-reform-bill-why-wont-anybody-say-its-wrong-it-principle/#more-4000
If yet another pointless inquiry were to be held – not another Hutton please – you would expect G Brown, E Balls and (still) Sir Hector Sants to be star witnesses.
Re your PS – you said years ago that Cameron was a weak performer in the House of Commons. Nothing has changed. Ed simply has to turn out more performances like this week’s. A smart move of his to summarise Cameron’s pathetic bluster – he should do that more often.
I don’t think many are interested in being discerning EL1; there’s an attitude that Londoners all live the life of Reilly.
There’s opposition to minimum wage and tax credits despite the fact that the Dad on minimum wage would only be raking in £13k per year. WTCs are essential if anyone is serious about wanting no benefits trap.
Two or three months back I wrote to the new head of the European Central Bank to say I was concerned about the the dependence on global economic growth to solve the debt crisis. I pointed out that I suspect declining global population growth rates and declining global economic growth are inter dependant. And it would be more ‘productive’ to plan for negative growth on european and global economic scales. It is hard to ignore the fact that the fastest growing economies have also the fastest growing populations
Subsequently I start to hear regular down grades for economic growth. The penny seems to have dropped. The Bankers need to keep up.
For those who are interested in the dark arts of communication strategy, and for conspiracy theorists, there is a show on iplayer or bbc ni if you have sky (or I suppose just bbc if you live there) called “The Estate”.
It follows people in a housing estate in northern ireland as they battle with unemployment, disability, alcoholism – though it isn’t grim like I’ve made it sound.
Anyway it has caused a big storm over there because people are going mad at the people on all kinds of benefits and being able to get houses, booze and fags, sky tv, mobiles, internet access etc.
There is a woman who gets £300 benefits, while one poor guy on it who works in a warehouse gets £260, for example.
I wonder, does this sort of programme ever get made to help the government push an agenda? (In this case benefit cutting.) On the beeb?
Happy Depressive on This Week tomorrow according to AC’s twitter! Can’t wait!
Friends Societies were a good idea, better known as Building Societies, but then they almost all decided to turn into banks in the 1980’s/90’s, in a never mind tomorrow let’s cream it today type of decision.
Global imbalancies and banks caused the financial crisis of 2007-08 plus the recession.
Bankers failed to manage their risks.
Traders, regulators, politicians, credit rating agencies and economists are also to blame for the “mess”.
Also ordinary people who took too much debt.
Hundreds of billions have now been poured to the banks in the UK alone.
Government still pays about £46bn a year to banks. And the cost of the loss of output in the future due to economic crisis caused by banks runs to trillions in Britain.
Yet no one has been prosecuted for this giantic mismanagement!
We know, for example, that credit rating agencies gave AAA ratings to financial products they knew were worthless.
We know that banks sold these products knowing they were worthless, and even bet privately against them!
We know that the collapse of Lehman Brothers happened because of foul play. Etc.
So it cannot be “back to business as usual”.
We need a full INVESTIGATION into the causes of the financial crisis and recession it caused.
It should be the biggest investigation ever. No stone should be left unturned.
Labour has nothing to fear about this. Labour did not overspend. Labour did not cause the financial crisis or global imbalancies.
Labour did not cause the subprime crisis in the US, or the collapse of Lehman Brothers.
Proper investigation would give Labour back its economic credibility and expose the lies of Osborne and Cameron.
So, I guess we will never see such an inquiry…
I think there’s widespread agreement that there are scroungers and cheats claiming benefits, just as there are in any situation. Does that need to be part of the content of every post as a reminder? .
If it does then perhaps it’s also a duty to mention any benefits that a working person will receive (till they’re also ended) such as Child Benefit, Sure Start, free lunches, breakfast clubs, after school playgroups etc. I really hope the warehouseman, if entitled to those other incomes, gets it.
Let’s pretend there’s a level playing field.
Aye you are right Ehtch, thats what happened most of the friends/building socities.
Similar story with the Trustee Savings Banks, inflation in the 1970s and the adoption of deposit insurance (we only did it in the 1970s not like the Americans who did it under Roosevelt.)
The demise of the Building Societies started with changes to banking laws in the 1980s, which allowed them to offer banking services. Further changes enabling demutualisation sealed their fate as organisations dedicated to provided not for profit, sensible mortgage lending services.
This is another example of Thatcher’s policies causing problems that have since come home to roost.
My post that’s appeared independently, beginning (unusually, I know) with “I think there’s widespread agreement……” is about people like your warehouseman’s situation.
It was meant for this cache.
I don’t know what role Thatcher had in it, but it was on her watch, it was a bad idea, so I agree with you Janiete.
Loss of building societies was a destabiliser in terms of mortgages and savings.
Loss of trustee savings banks (that one wasn’t thatcher) was an even bigger destabiliser in terms of savings.
Whats stopping us returning to those two types of organisation? If Ed did that as part of his responsible capitalism, I’d totally support him. Cameron would never think of this, but Ed could perhaps force his hand.
Fred has been thrown to the wolves here by the Coalition and that committee, so there is an element of victimisation to all this, which is the disturbing factor. As with like that protester that was sent to jail for three months for looting a bottle of water from a wrecked shop, or something like that it was.
In the very old days, Fred would have been sent to administer a penal colony in Oz, looking after a load of convicts who were sent there for stealing a loaf of bread or something, but would have kept his knighthood. Or in another context, for another country in time, sent to the Russian front and be able to keep his Iron Cross.
Yes. How much money does he need to get by? Always baffles me with these huge bonuses then massive pensions. After he has popped his clogs, his descendents won’t need to work for generations, while living in Monaco or Jersey or somewhere like that, to avoid inheritance taxes.
A different form is returning, as type of credit agencies (not loan shark type setups!). Most are started up in the poorer areas of the UK, as non-profit organisations, with stunningly low interest rates on loans that would put high street banks to shame.
I was thinking it might be! I’ll reply here.
As far as I can see, the programme did not mention the benefits, tax credits or whatever else the warehouseman gets, but he has 2 kids and one has spina biffida the poor lass (that bit is heartbreaking) so I assumed they must get some kind of benefit for that too.
The woman on £300, playing bingo every day and so on seems to be the main one causing the windup. The problem as always is taking money off her would punish the kids.
(Possible repeat post alert – disqus)
I was thinking it might be! I’ll reply here.
As far as I can see, the programme did not mention the benefits, tax credits or whatever else the warehouseman gets, but he has 2 kids and one has spina biffida the poor lass (that bit is heartbreaking) so I assumed they must get some kind of benefit for that too.
The woman on £300, playing bingo every day and so on seems to be the main one causing the windup. The problem as always is taking money off her would punish the kids.
“Ps. Ed v Dave so far this week. Played 2 won 2.”
True. I particularly enjoyed:
“The veto wasn’t for life… it was only for christmas.”
True, and delivered in the perfect tone by Ed.
A riddle :
Q. Who refers to an abstention as a veto?
What a lot of hot air we all generated and will Clegg manage to swallow the bitterness about Cam having called Osbo before abstaining and only calling him after doing so?
Is there even such a thing as a veto at EU meetings?
If there is and re this Parliament, should we regard the shocking number of abstentions as Nays?
I haven’t heard about them. Seems like more giving people credit and debt, as opposed to helping them save like the mutuals, building societies and trustee savings banks planned to do.
(I replied to your other one below.)
I called the veto as BS at the time, my posting record on other sites would confirm this. Cameron always selects the pro-EU option, his main intention was and is avoiding a referendum. Was really disappointed by the eurosceptics patting him on the back at the time!
The EU is set up to steamroller over vetos, referendums that give the wrong results, or even ones that look like they might (Greece.)
I bet you could re-post all your ‘calls’ if anyone expressed any doubt.
I’ve discovered that when a post is slow to go it does eventually; I’ve been trigger-happy and re-pressing after about 5/6 secs and consequently been repeating myself (beg m’lords’ n’ ladies’ pardons).
Counting to ten is useful on those occasions, just like with others.
I think you must mean Credit Unions Ehtch?
People have to save for about six months to prove they’re steady before applying for a loan.
I’d like to see all non-bank money transfer shops, Western Union etc and all giro cashing shops closed down; I have no idea why they’ve ever been allowed.
Grrrrrrrrrrr …… bad journey home.
What post them now but somehow make it look like I said them in the past?
If I could I would use that to go back and change my wrong calls such as John Kerry will be president, Gordon Brown will win in 2010, etc.
Ah I see, think I agree with that then.
That’s it Michele, credit unions – couldn’t remember the fandango name for them at that moment. And, as with your high street bank, you have to register with them and save with them for a while before being able get a loan, I think it is. But the length of time and hoop-jumping-through is less than with your high street banks, especially these days.
But believe credit unions are for small scale loans, for for instance, if you lose your job before christmas, and need a loan to spread payments through the next year to pay for it. And as well as if you suddenly get a hefty fuel bill after winter, and need someway to pay it off over the summer.
And also, there is pawn shops about – many have an excellent reputation, again with relatively low interest rates, as long as you have got something to pawn in the first place, that is.
No I was smartrrrrrsing that you might have links via bookmarks. It was a quip.
I smartrrrrsed on another thread but confused majorities of overall votes with that of seats and to explain that the hypotenuse was that of a very narrow-based triangle.
Brain is seized up with the cold; this northerner has gone soft darn sarf.
..”pawn in the first place” as in if you want to get your gold rings back at the agreed time, but some do extend pawn periods, I have heard. Honest.
“Brain is seized up with the cold; this northerner has gone soft darn sarf. ” Thats my excuse too!
I probably could go back through guardian and telegraph blogs (read both to stay such a balanced individual lol) but then I know none of you guys doubt me anyway 🙂
It was not just a banking disaster, it was a lack of regulation disaster caused by a weak and criminal labour government. It was Gordon Brown as Chancellor who insisted on the light touch to regulation whilst you alll sucked at the trough. You are an odious person and I just wish you would crawl back under the stone from which you first arrived.