A banker's punishment: Sir Fred Goodwin is now just Fred
Fred Goodwin, the former head of the Royal Bank of Scotland, was stripped of his knighthood for his role in the bank's 2008 crisis. But it's not clear hefty bonuses will get similar treatment.
In the good times he was the doyen of British banking. Wealthy and courted by decision makers and knighted by Queen Elizabeth for services to his industry, Sir Fred Goodwin, head of the Royal Bank of Scotland (RBS), seemed invincible.Skip to next paragraph
Subscribe Today to the Monitor
But then the financial crisis struck in 2008 and his one-time provincial bank – which had grown to be one of the world's biggest under his leadership – had to ask for a £43 billion ($68 billion) government bailout, effectively nationalizing it.
Sir Fred, with his reputation for arrogance and cost-cutting, earning him the nickname "Fred the Shred," is a household name. An affair with a senior colleague, which he tried to keep quiet through the courts, and a £342,000 ($545,000) annual pension – reduced from £703,000 ($1.1 million) only after public outcry – only added to the public image.
This week the government stripped him of his knighthood for his role in the bank's failure. He now joins the ranks of an unlamented group of former "sirs,"including Zimbabwe leader Robert Mugabe, former Romanian leader Nicolae Ceausescu, and financer Allen Stanford.
"I can feel sorry for the man because he has been humiliated and been ostracized in Edinburgh, and even had a brick through his window. But he was heavily involved in the RBS fiasco so must share the blame," recycling manager Kirsty Martin says.
Many feel the punishment is well-deserved – particularly since some never supported the knighthood, awarded in 2004 for services to the banking industry – but there is also concern that Goodwin is unfairly bearing the bulk of the blame.
"I think it was the right thing to do because he was in charge when it became the biggest corporate failure in British history. The problem I have is that he wasn't the only banker who made mistakes and so it looks like he's being made a scapegoat," says teacher Chris Quinn. "I don't think people should get honors just for doing their job properly, which is what Goodwin got it for. There are plenty of others who were involved in the credit crunch. And what about the huge bonuses which are still being paid out just for doing their jobs?"