Fred Goodwin to lose knighthood

 

Sir Fred Goodwin, the former boss of Royal Bank of Scotland, is to be stripped of his knighthood, in a move David Cameron hopes will deflect ongoing anger over high bonuses at the state-controlled bank. Sir Frederick Anderson Goodwin – or plain Mr Goodwin from now on – was given his honour for “services to banking” in June 2004, with the approval of Gordon Brown, then chancellor of the exchequer.  Criticism of Goodwin cut from FSA report IN BANKS Bank charges and bureaucracy irk customers Battle intensifies for BofA clients Santander annual profit falls 35% RBS in talks to revise bonuses In losing the honour, he joins Cambridge spy Sir Anthony Blunt and former Romanian dictator Nicolae Ceausescu. Between 2001 and 2008 the RBS chief executive, lauded for his buccaneering spirit, presided over a rapid expansion of the Scottish bank, building on the acquisition of English rival NatWest, which he had sealed while deputy-CEO in 2000. But his tenure ended with the bank recording a loss of £24bn – the largest in British corporate history – and being forced into the biggest bank bail-out the world has ever seen, with the injection of £45bn of government equity. Public anger over his role in RBS’s 2008 collapse – and his subsequent decision to take a generous pension from the stricken group – made him the bogeyman of the banking industry. The decision to remove the honour was taken by the “forfeiture committee”, an obscure body made up of Britain’s most senior civil servants charged with policing the system, and was announced at 5pm on Tuesday. David Cameron announced the referral to the committee on January 19, which was also the day that news broke of plans to pay Stephen Hester, Sir Fred’s successor at RBS, a bonus of about £1m. Mr Cameron said the forfeiture committee would look at the Financial Services Authority’s December account of the collapse of RBS, which he said was “material and important because of what it says about the failures of RBS, what went wrong and who is responsible”. “I think it is right that there is a proper process that is followed for something of this order,” Mr Cameron said. Nonetheless, the move was widely seen as a smokescreen to cover the government’s growing embarrassment at its inability to control bonuses at the bank, which is now 83 per cent owned by the taxpayer. Last week, RBS decided it would pay Mr Hester a £963,000 bonus for 2011, but on Sunday night, following an escalation of political pressure, particularly from opposition leader Ed Milliband, Mr Hester told the board he would waive the award. Sir Fred has been roundly blamed for the collapse of RBS due to his pursuit of aggressive strategies in corporate lending and investment banking, compounded by the high-risk acquisition of Dutch rival ABN Amro in 2007. He attracted widespread opprobrium for his refusal to apologise for his actions or give back any of his £16.9m pension pot. After months of protestations from politicians and the general public, which included an attack on his Edinburgh home, Sir Fred eventually agreed to give up a third of his pension entitlement. To ensure the honours system is not brought into disrepute, the Committee normally considers cases put to it when a holder of an honour has been found guilty by the courts of a serious criminal offence or has been censured or struck off by the relevant regulatory authority or professional body. Since leaving RBS, Sir Fred has not sought another role that would require regulatory approval by the Financial Services Authority. The FSA does not impose post hoc bans on individuals. The committee’s recommendations are submitted to the Queen through the prime minister.