Making It Happen: Fred Goodwin, RBS and the men who blew up the British economy
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widening funding gap of, ref 1
Younger becomes chairman of, ref 1
Younger enters, ref 1
see also Goodwin, Fred; Mathewson, George; RBS Americas; RBS Greenwich; RBS Insurance
Rumsfeld, Donald, ref 1
Salmond, Alex, ref 1, ref 2, ref 3, ref 4
Salomon Brothers, ref 1, ref 2
Samuels, Simon, ref 1
Sandler, Ron, ref 1
Santander, ref 1, ref 2, ref 3, ref 4, ref 5
Sants, Hector, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6
Schofield, Tony, ref 1, ref 2
Scholar, Tom, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6
Schroders, ref 1
Scotsman, ref 1, ref 2, ref 3
Scott, Bob, ref 1, ref 2, ref 3, ref 4, ref 5
bailout terms heard by, ref 1
Scottish Development Agency (SDA), ref 1
Scottish Enlightenment, ref 1, ref 2, ref 3
Scottish National Party (SNP), ref 1
Scottish Parliament, opening of, ref 1
Scottish Point (Punta Escocés), ref 1
Scottish Reformation, ref 1
Securities and Investments Board (SIB), ref 1
S.G. Warburg, ref 1
‘Silicon Glen’, ref 1, ref 2
Silver Jubilee Trust, ref 1
single currency, ref 1
Six Nations Championship, ref 1
Skilling, Jeffrey, ref 1
Smart, Alan, ref 1
Smart, Ian, ref 1
Smith, Adam, ref 1, ref 2, ref 3, ref 4, ref 5
Smith, John, ref 1
Société Générale, ref 1
Sorrell, Martin, ref 1
Souter, Brian, ref 1
Spence, Geoffrey, ref 1, ref 2
Stagecoach, ref 1
Standard Chartered, ref 1
Standard Life, ref 1, ref 2
Standard and Poor, ref 1
Stevenson, Lord, ref 1, ref 2
Stewart, Jackie, ref 1, ref 2
Stuart, Charles Edward (‘Bonnie Prince Charlie’), ref 1, ref 2
Stuart, James Francis Edward (‘Old Pretender’), ref 1
sub-prime mortgages, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6, ref 7, ref 8, ref 9
beginning of crisis of, ref 1
first securitisation of, ref 1
see also collateralised debt obligations; property prices
Sunday Telegraph, ref 1
Sunday Times, ref 1
Sutherland, Peter, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6, ref 7, ref 8, ref 9, ref 10
Swiss Bank Corporation, ref 1
tax revenues, fall in, ref 1
TCI, ref 1
Thatcher, Margaret, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6
ousted, ref 1
Thorburn, David, ref 1
3i, ref 1
Times, ref 1, ref 2
Tiner, John, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6, ref 7
Tories:
1983 victory of, ref 1
1987 victory of, ref 1
1992 victory of, ref 1
1997 defeat of, ref 1, ref 2
2001 defeat of, ref 1
2005 defeat of, ref 1
and bank regulation, ref 1
not blameless, ref 1
Tosca, ref 1, ref 2
Touche Ross, ref 1, ref 2, ref 3, ref 4, ref 5
Treaty of Union, ref 1
Tucker, Paul, ref 1
Turner, Adair, ref 1, ref 2
UBS, ref 1, ref 2, ref 3, ref 4, ref 5
Ulster Bank, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6, ref 7, ref 8, ref 9
unemployment, ref 1
Vadera, Baroness (Shriti), ref 1, ref 2, ref 3, ref 4, ref 5
Vallance, Lord, ref 1
Value at Risk (VaR), ref 1, ref 2
Vanity Fair, ref 1
Varley, John, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6, ref 7, ref 8
Wallace, William, ref 1, ref 2
Walpole, Robert, ref 1
Walters, Humphrey, ref 1
Wanless, Derek, ref 1
Waples, John, ref 1
Wark, Kirsty, ref 1, ref 2
Washington Mutual, ref 1, ref 2
Watt, Fred, ref 1, ref 2, ref 3, ref 4
Wealth of Nations, The (Smith), ref 1, ref 2, ref 3
Weir Group, ref 1
Welch, Jack, ref 1
Western Bank, ref 1
Westminster Bank, ref 1
‘What Went Wrong with RBS’ (Crutchley), ref 1
Wheatcroft, Patience, ref 1
Whelan, Kevin, ref 1
White, John, ref 1
Whittaker, Guy, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6, ref 7, ref 8, ref 9, ref 10, ref 11, ref 12, ref 13
bailout terms heard by, ref 1
and RBS losses, ref 1
William III/II, ref 1
Williams Deacon, ref 1, ref 2
Williams & Glyn, ref 1, ref 2
Willis, Graham, ref 1
Winter, Charles, ref 1, ref 2, ref 3, ref 4
Winters, Bill, ref 1, ref 2, ref 3, ref 4
Wolfe, Tom, ref 1
Wood, Peter, ref 1, ref 2
World Trade Center, ref 1
Wright, Alexander K., ref 1
Yahoo!, ref 1
Yorkshire Bank, ref 1
Younger, George, ref 1, ref 2, ref 3, ref 4, ref 5, ref 6, ref 7, ref 8
becomes RBS chairman, ref 1
death of, ref 1, ref 2
and HSBC secret talks, ref 1
illness of, ref 1
and NatWest, ref 1, ref 2, ref 3
and RBS hubris, ref 1
and Thatcher leadership campaign, ref 1, ref 2
Your Magazine, ref 1
List of Illustrations
1. A bust of William Paterson in the Bank of England, the institution he helped found before devising Scotland’s disastrous Darien scheme which led to the creation of The Royal Bank of Scotland in 1727.
2. Archibald Campbell, Earl of Ilay and the 3rd Duke of Argyll. The old Etonian aristocrat involved in the Treaty of Union became the Whig political master of Scotland and a founder of the Royal Bank.
3. The wily John Campbell, long-serving cashier of the Royal Bank who handed over the money Bonnie Prince Charlie needed to fund his invasion of England during the 1745 Jacobite rebellion.
4. The headquarters in the heart of Edinburgh’s Georgian New Town, from 1828 until the construction of Gogarburn.
5. Sir Michael Herries, chairman of The Royal Bank of Scotland Group when the bank was the target of failed attempted takeovers by Standard Chartered and what became HSBC.
6. George Mathewson, George Younger and Fred Goodwin ahead of launching their audacious bid for the much bigger NatWest in 1999.
7. ‘Fred the Shred’ being chauffeured in a car from the executive fleet in which he took such an interest.
8. The newly arrived Deputy Chief Executive and heir apparent to Mathewson in his office at St Andrew Square.
9. Riding shot gun. The boss of RBS added shooting to his other hobbies, which are repairing cars and playing golf.
10. Two knights, Mathewson and Goodwin, show the Queen and the Duke of Edinburgh around Gogarburn on 14 September 2005 when the monarch opened RBS’s new headquarters on the outskirts of Edinburgh.
11. Gogarburn: a landscaped campus for 3,500 staff, a symphony in glass, steel and sandstone built to Goodwin’s specifications as a home for a global financial giant.
12. Gordon Brown opening the London office of the US investment bank Lehman Brothers at Canary Wharf on 5 April 2004. Here he is chatting to the company’s chief executive, Dick Fuld.
13. Alan Greenspan receiving his honorary degree at Edinburgh University in 2005, accompanied by Brown and the then Governor of the Bank of England Mervyn King. The night before, the Governor of the US Federal Reserve had given the Adam Smith memorial lecture in Brown’s home town of Kirkcaldy, Fife.
14. Larry Fish, boss of Citizens, the American retail arm of RBS.
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15. Johnny Cameron, who oversaw investment banking. Bafflingly, in the aftermath of the financial crisis he was the only RBS banker to be singled out for investigation by the authorities.
16. ‘The Three Amigos’, Fortis boss Jean-Paul Votron, Fred Goodwin and Emilio Botin of Santander announce their disastrous three way bid for Dutch bank ABN Amro.
17. Accountant John Connolly. The Deloitte boss was a mentor to Goodwin. The firm he ran signed off on RBS’s accounts as it headed for disaster.
18. The regulators: (top left) John Tiner, the chief executive of the Financial Services Authority (FSA) from 2003 to 2007, an advocate of ‘principles based’ light touch regulation of the banks. (top right) Investment banker Hector Sants, who succeeded Tiner and tried to overhaul the organisation, but let RBS run its capital low when it was taking over ABN Amro in the autum of 2007. (Bottom left) Sir Callum McCarthy, civil servant, banker, chairman of the FSA from 2003 and keeper of bees. (Bottom right) Lord Turner, who followed as chairman of the FSA in September 2008 just as the Royal Bank and the financial system were about to blow up.
19. The end of boom and bust. Prime Minister Gordon Brown and Chancellor Alistair Darling announce the massive bailout of the banks by taxpayers. Downing Street, October 2008.
20. Goodwin and McKillop arrive on 20 November 2008 for the RBS shareholders meeting held to rubber stamp the humiliating government rescue. McKillop and Goodwin apologised to shareholders and staff.
21. George Mathewson after losing millions when the bank he built collapsed: ‘Bitterness is a waste of energy.’
22. Fred and Joyce Goodwin arrive back in Britain following a spell in exile.
23. Goodwin alone, after his marriage collapsed.
24. Clean-up operation: RBS chairman Sir Philip Hampton and Goodwin’s successor as chief executive, Stephen Hester, face MPs at Westminster.
1. A bust of William Paterson in the Bank of England, the institution he helped found before devising Scotland’s disastrous Darien scheme which led to the creation of The Royal Bank of Scotland in 1727.
2. Archibald Campbell, Earl of Ilay and the 3rd Duke of Argyll. The old Etonian aristocrat involved in the Treaty of Union became the Whig political master of Scotland and a founder of the Royal Bank.
3. The wily John Campbell, long-serving cashier of the Royal Bank who handed over the money Bonnie Prince Charlie needed to fund his invasion of England during the 1745 Jacobite rebellion.
4. The headquarters in the heart of Edinburgh’s Georgian New Town, from 1828 until the construction of Gogarburn.
5. Sir Michael Herries, chairman of The Royal Bank of Scotland Group when the bank was the target of failed attempted takeovers by Standard Chartered and what became HSBC.
6. George Mathewson, George Younger and Fred Goodwin ahead of launching their audacious bid for the much bigger NatWest in 1999.
7. ‘Fred the Shred’ being chauffeured in a car from the executive fleet in which he took such an interest.
8. The newly arrived Deputy Chief Executive and heir apparent to Mathewson in his office at St Andrew Square.
9. Riding shot gun. The boss of RBS added shooting to his other hobbies, which are repairing cars and playing golf.
10. Two knights, Mathewson and Goodwin, show the Queen and the Duke of Edinburgh around Gogarburn on 14 September 2005 when the monarch opened RBS’s new headquarters on the outskirts of Edinburgh.
11. Gogarburn: a landscaped campus for 3,500 staff, a symphony in glass, steel and sandstone built to Goodwin’s specifications as a home for a global financial giant.
12. Gordon Brown opening the London office of the US investment bank Lehman Brothers at Canary Wharf on 5 April 2004. Here he is chatting to the company’s chief executive, Dick Fuld.
13. Alan Greenspan receiving his honorary degree at Edinburgh University in 2005, accompanied by Brown and the then Governor of the Bank of England Mervyn King. The night before, the Governor of the US Federal Reserve had given the Adam Smith memorial lecture in Brown’s home town of Kirkcaldy, Fife.
14. Larry Fish, boss of Citizens, the American retail arm of RBS.
15. Johnny Cameron, who oversaw investment banking. Bafflingly, in the aftermath of the financial crisis he was the only RBS banker to be singled out for investigation by the authorities.
16. ‘The Three Amigos’, Fortis boss Jean-Paul Votron, Fred Goodwin and Emilio Botin of Santander announce their disastrous three way bid for Dutch bank ABN Amro.
17. Accountant John Connolly. The Deloitte boss was a mentor to Goodwin. The firm he ran signed off on RBS’s accounts as it headed for disaster.
18. The regulators: (top left) John Tiner, the chief executive of the Financial Services Authority (FSA) from 2003 to 2007, an advocate of ‘principles based’ light touch regulation of the banks. (top right) Investment banker Hector Sants, who succeeded Tiner and tried to overhaul the organisation, but let RBS run its capital low when it was taking over ABN Amro in the autum of 2007. (Bottom left) Sir Callum McCarthy, civil servant, banker, chairman of the FSA from 2003 and keeper of bees. (Bottom right) Lord Turner, who followed as chairman of the FSA in September 2008 just as the Royal Bank and the financial system were about to blow up.
19. The end of boom and bust. Prime Minister Gordon Brown and Chancellor Alistair Darling announce the massive bailout of the banks by taxpayers. Downing Street, October 2008.
20. Goodwin and McKillop arrive on 20 November 2008 for the RBS shareholders meeting held to rubber stamp the humiliating government rescue. McKillop and Goodwin apologised to shareholders and staff.
21. George Mathewson after losing millions when the bank he built collapsed: ‘Bitterness is a waste of energy.’
22. Fred and Joyce Goodwin arrive back in Britain following a spell in exile.
23. Goodwin alone, after his marriage collapsed.
24. Clean-up operation: RBS chairman Sir Philip Hampton and Goodwin’s successor as chief executive, Stephen Hester, face MPs at Westminster.
Table of Contents
Half-title page
Title page
Copyright page
Dedication page
Contents
Prologue
1 Tuesday, 7 October 2008
2 Company of Scotland
3 New World
4 Paisley Pattern
5 Battle of the Banks
6 The End of Boom and Bust
7 Fred the Shred
8 Sir Fred
9 Canny Scottish Bankers
10 Safe as Houses
11 Light Touch
12 Double Dutch
13 Bank Run
14 Boom Goes Bust
15 Five Years On
Afterword
Sources and Acknowledgements
Notes
Index
List of Illustrations