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Sad Knight (Photo credit:

Fred Goodwin's knighthood, awarded in 2004 for "services to banking", was "cancelled and annulled" on 1 February 2012.

Sad Banker (Photo credit:
The boss of Royal Bank of Scotland, Stephen Hester, has bowed to intense public and political pressure and given up a bonus worth almost £1m. Hester's decision came after Labour triggered a Commons vote on the controversial award from the 82%-state owned bank.

Hester's decision which emerged late last night while he was on holiday in Switzerland sparked some last minute re-writing from Fleet Street's finest with the Sun coming up with the headline 'Hester la vista, bonus'.

Guardian 30 Jan 2012

Last month, Stephen Hester, the current CEO of the Royal Bank of Scotland (RBS) was forced to give up his bonus. Last week, his predecessor, Fred Goodwin, who had been knighted for his "services to banking", had his knighthood taken away by Queen Elizabeth herself.


UK bank boss ‘deknighted’ for doing a lousy job
The former Royal Bank of Scotland head is in infamous company. He joins Russian spy Anthony Blunt, Romanian dictator Nicolae Ceausescu — who died in a hail of bullets — and Zimbabwean president Robert Mugabe in being “de-knighted.”

[ ... ]

Opinion writers at the Daily Mail have been baying for Goodwin’s blood for some time. In an recent editorial, the paper thundered,

More than any other individual, Sir Fred Goodwin personifies the greed and recklessness that caused the banking crisis of 2008, from which every family will be suffering for at least a generation.

As the dominant figure in RBS, he oversaw the bank’s breakneck expansion, buying up businesses with barely a thought to their viability and splashing out other people’s money to borrowers who could never repay.

In so doing, he marched the bank off a cliff edge, landing taxpayers with a £45-billion [ $70-billion ] bailout and helping precipitate the worst recession since the 1930s, before leaving with a £342,000 [ $540,000 ] a year pension.

Indeed, this improvident gambler, who stuffed his own pockets as he staked billions on bad risks, bears a heavy personal responsibility for blighting the jobs and living standards of millions … Can a man who has done such immense disservice to his industry and his country really be allowed to retain a knighthood for services to banking?

RBS’s CEO Says Political Scrutiny of Bonus Was ‘Discomforting’
Feb. 8 (Bloomberg) -- Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester said the political scrutiny of his bonus has been “discomforting to say the least.”

[ ... ]

Hester, 51, has been at the center of a political storm since it was announced on Jan. 27 he would get a 963,000-pound ($1.5 million) bonus for 2011 even after shares of the bank slumped. He waived the bonus after the U.K.’s opposition Labour Party said it would seek a Parliamentary vote on the payment.

The government was forced to rescue RBS at the height of the financial crisis, injecting 45.5 billion pounds of taxpayer money into the lender, making it the costliest bailout of any bank in the world. Hester said in the e-mail that the cost of cleaning up the lender he inherited from former CEO Fred Goodwin totals 38 billion pounds so far.

Could this happen here in the U.S.? If our government joined us and Occupy Wall Street in pressuring the bankers, we could do this too. But most of them don't.

I like David Dayen's take on this:

The other part is that we haven’t seen enough political pressure, certainly not from a political party, about bonus culture or the obscene profit-making from the very sector that crashed the rest of the economy. The real reason this happened at the Royal Bank of Scotland was that Ed Miliband, the leader of the British Labour Party, planned to force a vote on the bonuses in the House of Commons. [ ... ] The triangle was closed between politicians, activists and the media, in this case.

Needless to say, we didn’t see that on the AIG bonuses, for example. In fact too many pundits and higher-ups threw themselves in front of the AIG executives, accusing those seeking clawbacks of engaging in class warfare and interfering in private contracts.

Social opprobrium, shunning, or whatever you want to call it can only go so far to serve the public needs. But when it rises with a political dynamic, then you can make progress.

Tis but a scratch


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