Ex-RBS Boss Goodwin Stripped Of Knighthood

Former Royal Bank of Scotland (RBS (LSE: RBS.L - news) ) boss Fred Goodwin has lost his knighthood after it was decided he brought the honours system into disrepute.

The Prime Minister described the move as "the right decision" and Chancellor George Osborne said stripping the title from 'Fred the Shred' - who presided over the worst corporate disaster in British history - was "appropriate".

Political pressure for the withdrawal has been mounting over Mr Goodwin's role in the collapse of RBS amid the credit crunch of 2008.

His actions meant the bank, which is now more than 80% owned by the Government, needed rescuing and was bailed out with £45bn of taxpayers' money.

Mr Goodwin - who got his nickname from zealous cost-cutting while at RBS - was knighted in 2004 for "services to banking".

He lost the honour following consideration by the Forfeiture Committee and he will no longer be able to use the title.

Honours are usually only removed from individuals who have been convicted of a crime.

The Cabinet Office said: "It was recognised that widespread concern about Fred Goodwin's decisions meant that the retention of a knighthood for 'services to banking' could not be sustained.

"The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case."

The recommendation to cancel Mr Goodwin's knighthood was conferred to the Queen by Prime Minister David Cameron.

He said: "The FSA (Financial Services Authority) report into what went wrong at RBS made clear where the failures lay and who was responsible.

"The proper process has been followed and I think we've ended up with the right decision."

Labour leader Ed Miliband said the move was "only the start of the change we need in our boardrooms".

"We need to change the bonus culture and we need real responsibility right across the board," he said.

"I think that is what the public want, I think that is what government working with the private sector needs to deliver."

TUC general secretary Brendan Barber also welcomed the decision, but added the Government still needed to "crackdown on greed".

"We need real action, not a symbolic move designed to deflect from the lack of real policies such as employee representation on remuneration committees," he said.

RBS has declined to comment on the decision to annul Mr Goodwin's knighthood.

The former chief executive, who was credited with building RBS into an empire, earned more than £4m in 2007.

In that year the bank celebrated the capture of Dutch rival ABN Amro in a £49bn deal.

But the acquisition proved disastrous for RBS as markets turned sour in the grip of the credit crunch, exposing a weak balance sheet and bringing the firm to the brink of the
abyss.

It was Mr Goodwin's pension deal following his departure from the bank in November (Stuttgart: A0Z24E - news) 2008 that prompted public outrage - a £703,000-a-year package, including a £2.7m lump sum.

His house was attacked and an effigy of his head was displayed on a spike in London as he became a magnet for fury over fat cat pay amid the developing financial crisis.

He bowed to public pressure and offered to reduce his annual pension payout from £555,000 to £342,500.

In having his knighthood taken away, Mr Goodwin joins notorious figures such as Soviet spy Anthony Blunt and Zimbabwe's Robert Mugabe.