The FSA announcement today that it is taking no action against Fred Goodwin or RBS tells you a lot about the state of Britain today. The two biggest disasters of the last decade are the Iraq War and the financial cataclysm. In terms of the UK involvement in these episodes the two key perpetrators, Blair and Goodwin, have escaped with no personal penalty whatsoever – neither prison nor the systematic stigma of disgrace nor disqualification from public life. The Iraq War cost the UK scores of British lives (and over 100,000 Iraqi lives) and a waste of some £7bn. The collapse of RBS after the disastrous takeover of ABN Amro cost UK taxpayers a £45bn bail-out. What’s the meaning of accountability in Britain today?
We have had, and millions of families will still be experiencing for years the painful consequences of, a catastrophic financial crash, yet not a single banker is being held responsible. RBS was driven to the edge of collapse after after the extraordinarily foolish (and recognised to be so by many at the time) takeover of the Dutch bank, ABN Amro, at a price which reflected Goodwin’s mania for acquisitions rather than any hard-headed business assessment. So do we just wring our hands and walk away?
Apparently yes. Sir Philip Hampton, the current RBS chairman, says: “It’s clear to me that what happened was a series of major misjudgements about lending decisions and the acquisition of ABN Amro…These were very big, bad business judgements, but they were not acts of criminal vandalism. People made mistakes.” So that’s it, then. No-one to blame, shit happens (as Cameron said the other day), just a few blunders, nothing to worry about.
There could hardly be a better symbol of the overweening arrogance of the financial elite, now the most powerful force in Britain today. They see themselves as a race apart, with governments in hock to the financial markets, and able to throw the whole economy backwards into grinding reverse as a result of their own monumental mismanagement – and then walk away.
The FSA appears not just toothless, but gumless and jawless. Mismanagement on this gigantic scale cannot simply be written off with such Olympian insouciance. Either it must be severely punished (to avoid moral hazard, causing others to believe that impunity is normal) or top executives should be tied in themselves personally into the decisions they take by carrying a proportion of liability for the consequences, and if they can’t meet that significant personal liability from their own assets, then they are sent to prison like any other debtor.