Earlier this week, Royal Bank of Scotland CEO Ross McEwan announced that he had a new professional goal for himself. “My aspiration is not to run the world’s biggest bank,” he said via video posted on the bank’s website. “My aspiration is to run the best bank in the UK – nothing to do with size.” What role will the men and women who make up Team RBS come in vis-à-vis said aspirations? That’s where this conversation gets awkward. Read more »
Royal Bank of Scotland
Sometimes when we say that a financial report is a fun read we mean “in a nerdy, full of charts way,” but the British Financial Services Agency report on the implosion of RBS is actually quite full of bitchy gossip, though also 450 pages long so possibly not holiday-travel plane reading. Let the Guardian fill in the brackets:
Johnny Cameron, the former head of Royal Bank of Scotland’s investment banking division, has admitted he did not know how billions of pounds of complex loan structures linked to US sub-prime mortgages worked – despite pushing his staff to expand aggressively into this area. …
Cameron told the FSA: “I don’t think, even at that point [May 2007, well after sub-prime problems had begun to spiral in the US] … I had enough information. Brian [Crowe, his deputy] may have thought I understood more than I did … And it’s around this time that I became clearer on what CDOs [collateralised debt obligations] were.”
The dynamic here is kind of fun to picture: Cameron is a traditional corporate banker, used to glad-handing clients and sounding smart, in the senior role. Crowe is the harder-charging guy from a trading background. The report quotes a subordinate as saying “Johnny was the bigger thinker, more customer involvement. Brian was more focused on the markets and market risks.” You can imagine Crowe saying things like “Gaussian copula” and “DV01″ and “CDO,” and Cameron mumbling “yes, precisely so, I agree completely, more tea my good chap?” I’m pretty sure “Brian may have thought I understood more than I did” because Cameron wouldn’t dream of correcting him. Read more »
…they are different from you and me.”
The personage of Sir Fred Goodwin- who resigned as head of Royal Bank of Scotland about a month before that institution reported the largest yearly loss in United Kingdom history (£24.1 billion) and whose house in Edinburgh was vandalized by anti-capitalist terrorists- commands a yearly pension of some £703,000, a sum which, jumping on the executive pay bandwagon, Lord Myners has been pressuring the Royal Bank of Scotland to trim.
It turns out that the position of Grand Master at RBS had some other perks as well, such as getting your name on the five pound note. This, it seems, may have the tendency to drive men mad. Lord Myners, in classic Angloharangue, sums up the results for us:
I have been advised that in the Royal Bank of Scotland’s headquarters in Gogarburn, Sir Fred Goodwin employed somebody whose sole job was to ensure that bank notes dispensed from automatic telling machines in that headquarters building bore his signature and his signature alone.
Goodwin insists cash machines hold ‘his’ notes [The Times Online]