THWOTH wrote:I don't think there's a problem with recognising peoples achievment in any area of life, nor in giving national recognition for people's work and service. Fred the Shred was granted his knighthood for services to banking. Surely his service to banking up until the time he was awarded his knighthood still stands as a matter of record.

Fred Goodwin, his former organisation and its business practices played their part in a critical economic incident, but that part was not unique. The fact that he was a part of a situation which led to the state picking up the shortfall in his bank's assets immediately following the credit crash was still an invaluable service to banking, wasn't it? He saved the bank in effect, admittedly from its own folly, but nonetheless people's savings were protected, there was still money in the cash machines, jobs were secured. This is a good outcome for the bank just as it is for the public.

The public's ire of course is only applicable, only has any moral force or political weight, because the taxpayer now has such a massive stake in paying off the bank's huge losses. RBS is accounted for by government as part of the public sector and dthe disquiet about Fred's knighthood, along with the government's decision to ultimately revoke it, just goes to show that the public expect higher standers in the areas of performance, responsibility and accountability than the private sector does for itself. Holding Fred accountable to such high standards retrospectively probably seems a little unfair to him. Perhaps it is?

wikipedia wrote:From the time that Goodwin took over as chief executive until 2007, RBS's assets quadrupled, its cost-to-income ratio improved markedly, and its profits soared. In 2006 pre-tax profits climbed 16% to £9.2 billion with significant growth coming from its investment banking business.[16][17] By 2008 RBS was the fifth-largest bank in the world by market capitalisation.[3] One of the factors in its rise was its enthusiasm for supporting leveraged buyouts. In 2008 it lent $9.3bn, more than double its nearest rival.[18]

However, following investor unrest in the build-up to RBS's acquisition of a $1.6bn minority stake in Bank of China in 2005 Goodwin was criticised by some RBS shareholders for putting global expansion ahead of short-term financial returns.[3] Between 2002 and 2005 the share price plateaued at around £17 per share, having nearly trebled between February 2000 and May 2002.[19] Goodwin was accused of megalomania by some shareholders, as reported by Dresdner Kleinwort analyst James Eden (who said he thought the label was 'unwarranted').[20] After the Bank of China deal, he was forced to promise RBS shareholders he would not indulge in any further big acquisitions and focus instead on growing the group organically.[3]

However, in early 2007 Dutch bank ABN Amro was under pressure from hedge funds, including Chris Hohn of the hedge fund TCI, to break itself up in order to maximise shareholder value. ABN chief executive Rijkman Groenink suspected RBS of acting in concert with the hedge fund Tosca, which was chaired by former RBS Chairman Mathewson and recommended the takeover bid of an RBS consortium, against the proposed merger with Barclays Bank.[21] Goodwin arranged a consortium of RBS, Fortis and former RBS shareholders Grupo Santander, to purchase the assets of ABN Amro and break them up in a three-way split. According to the proposed deal, RBS would take over ABN's Chicago operations, LaSalle Bank, and ABN's wholesale operations; while Santander would take the Brazilian operations and Fortis the Dutch operations. In a manoeuvre "labelled in all quarters as a poison pill"[21] ABN Amro agreed to sell key RBS target LaSalle to Bank of America for $21bn, but in July 2007 the consortium offered the same $98bn for ABN's remaining assets, with a higher cash component (93%).[22] The deal was struck in October 2007 as the global liquidity crisis began to develop, with Barclays withdrawing its EUR61bn bid and ABN's shareholders endorsing the EUR71bn RBS takeover.[21] Coming after the nationalisation of Northern Rock due to the freezing of the wholesale money markets, the deal proved the final straw for RBS, as it severely weakened its balance sheet not only through the size of the acquisition but due to ABN Amro's substantial exposure to the US subprime mortgage crisis.[3]