London - Britain has stripped former head of Royal Bank of
Scotland Fred Goodwin of his knighthood on Tuesday, putting a banker reviled by
tabloids as "Fred the Shred" alongside Zimbabwe's Robert Mugabe and
Romania's Nicolae Ceausescu as those who lost the high honour.
Fred Goodwin, elevated to the rank of knight of the realm by
Queen Elizabeth in 2004, steered one of Britain's largest banks to near
collapse with the catastrophic buyout of a Dutch bank, a disaster that helped
bring on the global financial crisis.
He has become a target of public fury in Britain for his
role in the 2008 crash - which led to the government spending £45bn to bail out
his bank - and the lavish taxpayer-funded pension he took with him when he
"RBS came to symbolise everything that went wrong with
the British economy over the last decade and under Fred Goodwin that's when it
happened and I think it's appropriate therefore that he loses his
knighthood," Britain's Conservative Finance Minister George Osborne said.
The decision to strip Goodwin of his knighthood came two days
after Goodwin's successor at RBS, Stephen Hester, announced he would turn down
a million pound share bonus that had drawn withering scorn from all of
Britain's major political parties.
A report in December by the Financial Services Authority
(FSA) regulator into the near-collapse of RBS blamed Goodwin and other former
RBS bosses, while also criticising the FSA itself and the then-Labour
government for lightweight financial regulation.
Conservative Prime Minister David Cameron expressed
satisfaction at the decision to strip Goodwin of the knighthood, while
opposition Labour Party leader Ed Miliband - who had demanded a parliamentary
debate on Hester's bonus - continued to call for deeper reforms at banks.
"It is right Fred Goodwin has lost his knighthood but
it is only the start of the change we need to see. We need to change the bonus
culture and we need to change the rules so we see real responsibility across
the board," he said.
Knighthoods for subjects of the British queen - and honorary
ones for foreigners - are among the highest honours bestowed by Britain for
outstanding achievement or service. As a knight, Goodwin had the right to be
called "Sir Fred".
He joins a small list of those who have been stripped of the
honour, alongside figures such as the Zimbabwean president, the former Romanian
Communist dictator and Anthony Blunt, a notorious British double agent who
spied for the Soviets.
Goodwin oversaw about 20 deals while in charge of RBS, as
the Scottish bank embarked upon an expansive acquisition spree. His habit of
extracting savings from deals by axing staff earned him the nickname "Fred
After the announcement, newspaper headline writers had a field
day. "Sir Fred's Honour Shredded" ran the banner headline of
Wednesday's edition of the Financial Times, while the popular Sun tabloid's
take was: "Fred's 'Sir' is Shredded".
The electrician's son was born and raised in Paisley, near
Glasgow, where he attended the local grammar school before studying law at
Glasgow University. He qualified as an accountant and made his mark in banking
by helping clean up the mess of collapsed BCCI bank in the early 1990s.
He rose swiftly through the ranks after joining RBS, but his
pursuit of Dutch bank ABN AMRO proved a deal too far. The credit crisis saw the
value of the ABN AMRO assets fall rapidly and RBS found itself close to
To prevent a wider economic collapse, the state bailed out
the nearly 300-year-old bank, buying an 83% stake.
Goodwin added to the scorn of many Britons when he fought to
hold on to a pension pot worth almost 700 000 pounds a year from the now mainly
publicly-owned bank. A public outcry forced him to settle for about half as
The abrogation of his title was a very British punishment in
a country whose public honours system still reflects centuries of class
distinction and tradition.
The Unite trade union welcomed the move to strip Goodwin of
"It is a token gesture to strip Fred Goodwin of his
knighthood, but one which will be well received by the thousands of workers who
lost their jobs during his rule," said the union's national officer David
The woes of RBS have come to symbolise for many in Britain
more serious problems with the country's banking industry. Many are still angry
that bankers continue to earn millions while elsewhere thousands lose their
jobs as the economy weakens.
Conservative Party politician Mark Field said British
authorities should look at clawing back Goodwin's pension.
"I have always felt the far more serious thing rather
than the area that everyone has been jumping on the bandwagon about - his
knighthood - has been the fact that he got a pension," he told the BBC.
"That was signed off at a time when we knew that most
of the so-called profits RBS had achieved over the years of Fred Goodwin's
stewardship were in fact entirely illusory."