Friday, February 3, 2012
Much ado in the UK this week about banking. First, the news that the CEO of the Royal Bank of Scotland, which had to be taken into public ownership to save it from tanking during the Fall, was due to be awarded a £1m bonus for, er, well actually no one seemed to be sure what the bonus was for as RBS was hardly doing well. Understandably the public reaction was rather negative. Eventually, under much pressure, the CEO said he would forego the bonus, with much the same grace as my eight-year-old hands over the controls of the Wii to his sister when I tell him it's time for her go.
Then, tumultuous news that a former CEO of Royal Bank of Scotland, Sir Fred Goodwin, was to become a mere mister. The honours forfeiture committee - and one can only wonder how you get to sit on that - decided that, because of his role in the crash, Goodwin, who was knighted in 2004 for his services to the banking industry, should have his honour removed. The committee said:
[We] are clear that the failure of RBS played an important role in the financial crisis of 2008/9 which, together with other macroeconomic factors, triggered the worst recession in the UK since the Second World War and imposed significant direct costs on British taxpayers and businesses. Fred Goodwin was the dominant decision-maker at RBS at the time. In reaching this decision, it was recognised that widespread concern about Fred Goodwin's decisions meant that the retention of a knighthood for 'services to banking' could not be sustained.
Great, you might think, especially if, like me, you believe the criminal, indecent greed of our bankers led directly to the economic armageddon facing us. It's good that they're finally getting their comeuppance, even if it's purely symbolic. Isn't it?
I have to say the whole thing left me cold. It smacks of the worst kind of scapegoat-ism. Fred Goodwin was already public enemy number one, reviled in the press for the massive pension he received (£16m), given an obligatory daft nickname (Fred the Shred), and revealed as an adulterer (for some reason that escapes most people a rich ex-banker having an affair was deemed to be big news).
Goodwin is clearly overpaid, incompetent and may well not be a very nice person. The bank that employed him did spectacularly badly under his charge. Yet surely these charges can be levelled at almost every person of financial seniority during the last decade? How are we going to punish them? Or is it right that Goodwin becomes the sole repository for all our ill-will and anger, a sort of banking Aunt Sally? Half the banking sector of Britain has an honour of some sort. Will they all be stripped of them? And while we're at it, there's a fair few Lords sitting in the House of Lords with criminal records, even the odd jail sentence in their past. Dear old Jeffery Archer (Lord Archer of Plagiarism) did jail time for perjury, and yet he gets to pass and ratify laws.
Which brings me on to the real reason the whole synthetic episode leaves me cold. The existence of a very silly, feudal honours system in the first place. What sort of place hands out gongs and knighthoods in the first place? They were original given by Kings to curry favour and loyalty among his subjects in more medieval times. Nothing has changed. Inevitably they're handed out by whichever party is in power to the cronies who helped them get elected - in other words, if you donated billions of pounds, you get a nice peerage or a knighthood in return. They are entirely bought. Yes, a few CBEs and OBEs are handed out to sportsmen and women and actors for kicking a ball well or dressing up and pretending, and the odd worthy bauble goes to a member of the public who has done good things, but it's all a farce, and an abomination in a forward thinking, progressive country.
If removing Goodwin's knighthood leads to a more grown-up, meritorious attitude to reward, a serious rethinking of how our banking sector operates, and the eventual abolition of the honours system then it might have been a good thing. Until then it seems pointless and showy.
Dan - Friday
at 5:58 AM