Royal Bank of Scotland
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 »
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 »
It is expected that 2,800 heads will roll at Royal Bank of Scotland. Global Banking and Markets (GBM) is the hatchetman de jour. Brace yourselves, dear friends.