Disgraced banking boss sees knighthood shredded
Fred ‘The Shred’ Goodwin has come to symbolise the sort of reckless banking blamed for sparking global recession. Now the Queen has stripped his honours. Is this justice, or scapegoating?
It is a humiliation usually reserved for traitors, criminals and murderous dictators. Fred Goodwin is none of these, yet yesterday he joined the role-call of villains who have been stripped of a knighthood by the British crown.
In 2003 Goodwin was perhaps the most admired figure in banking. After turning the Royal Bank of Scotland (RBS) into a financial powerhouse, he had been named Businessman of the Year. He was on top of the world, and the following year that place seemed assured when he was knighted by Queen Elizabeth II.
Even in those heady days some questioned his heroism. A trigger-happy approach to firing employees had earned Goodwin the nickname ‘Fred the Shred’, while RBS’s success was based on hostile takeovers of other companies. Instead of growing a business, he had built one on the conquest of others.
But like many conquerors before him, Goodwin stretched too far. In 2008 the banking crisis struck, and his bold methods suddenly seemed foolish: risky investments like his 2007 takeover of the Dutch bank ABN Amro had left his empire vulnerable. To prevent its collapse the government was forced to buy out RBS for £2.5 billion. Sir Fred resigned in disgrace.
With a reputation for ruthlessness and extravagance – he famously ordered a £35 million Falcon company jet – Goodwin is a public enemy in his own country. To many he personifies the greed that led to economic collapse.
What exactly was Goodwin’s crime? He could argue that he is now being punished for exactly the behaviour that was celebrated before – making a medium sized bank into a giant. He broke no laws, nor was he personally responsible for the financial crisis.
But he is a standard bearer for the attitudes that are widely blamed for Britain’s crash – and after all, he did cost the public billions. For many, it is grotesque for him to keep his rewards.
Honour among thieves
About time, say Goodwin’s critics: he may not have been a criminal but he was certainly irresponsible. Meanwhile he has kept his ill-gotten gains of riches and honours. We can’t recover the first, but if we can remove his title, by all means let us: it will send a message that destructive gambling will never again be tolerated.
Others view this whole affair as an unseemly distraction. It takes more than one person to break a global economy – should every banker who made an ill-advised deal be publicly humiliated? No, they say, Fred Goodwin’s only sin was buying into a bad system. If we bay for the blood of a few individuals while ignoring the culture that created them, nothing will change.
- Which of these three professions do you think should earn most honours: the church, law or medicine?
- When disasters happen, do we find someone to blame in order to avoid feeling guilty ourselves?
- Research someone who you think deserves to receive public recognition for something they have done, and write 200 words about why they should be rewarded with honours.
- Write a list of five causes of the banking crisis and the recession.
Some People Say...
“Banker-bashing is the modern version of witch-hunting – and just as ignorant!”
What do you think?
Q & A
- Will Sir Fred’s public humiliation make any difference?
- Not really – at least in the sense that he has already lost his job and is unlikely to be offered another of any great prominence. His personal shame will not affect anyone else beyond his immediate family. But in another sense it will make a huge difference to that elite band of around 3,000 men and women who may be called ‘sir’ or ‘dame’.
- How so?
- Because they will be reminded rather bluntly that if they behave badly they too may join the growing list of people whose honours have been removed. This list includes Robert Mugabe, the ruthless ruler of Zimbabwe; Nicolae Ceausescu, the murderous Romanian dictator; Anthony Blunt, the notorious spy and the jockey Lester Piggott who was jailed for tax fraud.
- The picture of a holy, questing warrior owes more to legends like King Arthur than real life: early knights were more often violent warlords than saviours of damsels in distress. But knighthood lost its military associations long ago and now, many countries keep it just as a way of honouring distinguished citizens.
- Royal Bank of Scotland
- RBS was founded in 1727. Although it was always one of Scotland’s largest banks, it only ventured slightly beyond Scotland until around 2000, when Fred Goodwin led an amazing – and ill-advised – expansion. The banking crisis of 2008 caused RBS’s downfall, and now it is mostly owned by the UK government.
- Hostile takeovers
- A hostile takeover happens when one company tries to buy another without the agreement of its managers.
- One employee of RBS claimed that fresh fruit was flown in daily from Paris to London and £5.3 million was spent refurbishing a listed building – dubbed ‘Sir Fred’s Pleasure Dome’ by staff – which was rarely used.