Tuesday, December 14, 2010

WikiLeaks: Royal Bank of Scotland Shocka!

Now remember before I continue that there are people arguing that we should not know the information in the WikiLeaks cables.

Ok, so Royal Bank of Scotland (RBS) collapsed during the finaincal crisis and had to be bailed out using our money. Just prior to the collapse chief executive Fred Goodwin gets £700,000 per year pension award from RBS. Then a month later RBS announced that its 2008 loss totalled £24.1bn, the largest annual loss in UK corporate history.

So who was to blame for this? Turns out - nobody! Like rain or loosing a sock, itturns out it was just one of those things..

The Financial Services Authority is poised to announce it has closed its investigation into Royal Bank of Scotland and will take no further action against any of its former directors – including chief executive Sir Fred Goodwin – despite the £45bn bailout of the Edinburgh-based bank.

The City regulator appointed accountants PricewaterhouseCoopers to conduct a detailed analysis of the events that took place in the run-up to the near-collapse of the bank in October 2008. They are understood to have concluded that while management made poor judgments, there are no grounds to take enforcement action against the individuals involved.

Then comes WikiLeaks and in private conversations it was revealed that perhaps somebody was to blame after all..

The cables sent from the US embassy in London, report that [RBS Chairman Philip] Hampton told a visiting delegation of politicians that one of the biggest mistakes made by the bank was its takeover of Dutch bank ABN Amro just as the credit crunch began in the autumn of 2007. This acquisition left the bank with a wafer-thin capital cushion and ultimately led to the £45bn taxpayer bailout of the bank in October 2008.

But again, there are some who argue we should not know this information...

1 comment:

John Serpico said...

The takeover of ABN Amro by The RBS was obviously a big news story in The Netherlands. The fact that this action went against RBS - if not directly then indirectly - and paved the way to their near collapse, I always assumed was common knowledge. In The Netherlands, at least. I'm surprised, therefore, that the leaked cable can cause such a shock?