THE FORMER BANK chief who infuriated the British public by leading the bank to near-collapse and then walking away with a fat pension was stripped of his knighthood yesterday.
The move was a rare punishment that puts him in the company of criminals and dictators.
Queen Elizabeth II “canceled and annulled” Fred Goodwin’s knighthood for the key role he played in the failure of Royal Bank of Scotland, a financial disaster that helped trigger the recession in Britain and forced taxpayers to bail out the bank, the Cabinet Office said.
Knighthoods are rarely revoked, but the government said Goodwin “had brought the honors system into disrepute” and that the “scale and severity” of the impact of his actions made it an exceptional case.
After losing the honor, Goodwin joins a group that also includes Zimbabwean President Robert Mugabe and Romanian dictator Nicolae Ceausescu.
“I think we’ve got a special case here of the Royal Bank of Scotland symbolizing everything that went wrong in the British economy over the last decade,” Treasury chief George Osborne said. “Fred Goodwin was in charge, and I think it’s appropriate that he loses his knighthood.”
Since he left RBS in 2008 with a multimillion-dollar pension as the bank was foundering, Goodwin has become a high-profile public villain of the financial crisis in Britain.
Goodwin built the Royal Bank of Scotland into one of the world’s largest banks and was knighted in 2004 for services to banking. But four years later, he led the bank to ruin with a multi-billion dollar takeover of the Dutch bank ABN Amro just as the credit crisis was starting to bite.
Goodwin resigned in October 2008 as the bank was failing, provoking the public’s ire by leaving with 16 million pounds ($25 million) in pension benefits.
The British government had to spend 45 billion pounds ($71 billion) bailing out and nationalizing RBS, and taxpayers now own an 82 percent stake.
A report on RBS published last year by the Financial Services Authority blamed the RBS debacle on bad decisions, rather than dishonesty or any violation of regulations.
Prime Minister David Cameron welcomed the move and called it “the right decision.”
“The FSA report into what went wrong at RBS made clear where the failures lay and who was responsible,” he said in a statement.
Goodwin, 53, is likely to retain his other title — “Fred the Shred,” a tribute to his aggressive cost-cutting while expanding RBS.
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