➶ Shredded: Inside RBS: The Bank That Broke Britain Free ➬ Author Ian Fraser – Transportjobsite.co.uk



10 thoughts on “Shredded: Inside RBS: The Bank That Broke Britain

  1. says:

    Interesting to start with, but became repetitive Some editing would have been helpful The author can find no one to say anything favorable about It does provide insight on huge governance failures and also that the fact that many analysts were aware of the risks about RBS s growth strategy.


  2. says:

    There were a number of books that came out post recession about the demise of Bear Stearns, Lehman Brothers, WaMu, etc., but this was the first one that I ve read about RBS To start, the book is impeccably researched, and as a result the level of detail and nuance that Fraser is able to convey is staggering Fraser lives in Scotland, and was an RBS customer he left the bank in 2013, tired of their incompetence and malfeasance which gives his prose a tinge of the angst and hurt that all RBS customers and to a greater extent all Scotsman felt when the bank they were so proud of crumbled amidst mismanagement and gross negligence In many books like this, the writer comes across as ham handed and blames the entire episode on one person, or one group Fraser does not do this he recognizes that the fall of an institution this large can t be blamed on one person He writes that everyone, Fred Goodwin CEO , the RBS board, the RBS chairmen, the head of the BOE, regulators, President Clinton repeal of Glass Steagal and shunning regulation of the CFTC , all contributed, which was a refreshing viewpoint I highly recommend this book to anyone interested business finance, or corporate governance.


  3. says:

    Other than Lehman Brothers, RBS is the most notorious example of hubris leading up to the 2008 09 banking meltdown Its market capitalisation stood at 76 billion in May 2007 than every other listed Scottish firm put together and the bank employed up to 200,000 people worldwide By October 2008 it was worth only 16 billion and on the verge of collapse, relying on taxpayer support to keep it solvent CEO Fred Goodwin emerged from this mess as the unacceptable face of capitalism and is the nearest thing this generation has to a James Bond esque villain Only last week the Scottish Crown Office announced Fred the Shred and his fellow cronies will not face prosecution for misleading investors over a 12 billion rights issue in 2008, despite a five year review and trawling through 160,000 documents It seems RBS and its disgraced former Emperor cannot stay out of the news for all the wrong reasons.Ian Fraser s epic inside story relies on up to 120 current and former employees of RBS, most of whom prefer to remain anonymous But the biggest scoop is the author s access to Sir George Matthewson former CEO and Chairman who nominated Goodwin as his successor and Iain Robertson Non Executive Chairman of the Corporate Banking Financial Markets Division This leaves Fraser with no shortage of rich accounts from the protagonists present during the crisis and, indeed, those that helped ferment it.Fred Goodwin s fall from grace should already be familiar to anyone with a passing interest in current affairs and an awareness of tabloid headlines over the last eight years Fraser doesn t dwell on the excesses, but reminds us that Fred spent a distasteful 18 million on Corporate Jets employed his sporting heroes Jackie Stewart and Jack Nicklaus as 3 million a year Global Ambassadors had fresh fruit flown in daily from Paris obsessed over the colour of the bank s carpets and lavished 500 million on the RBS Connecticut HQ at the height of his powers The author is not the first to suggest the man at the helm from 2000 to 2008 was an unapproachable megalomaniac, but at the heart of this book is a determination to uncover those conditions that allowed profligacy and recklessness to permeate a once trusted and respected institution A whole chapter dedicated to RBS s famous takeover battle with Bank of Scotland for Nat West in 1999 2000 is a welcome context to subsequent events, and Fraser is keen to remind us how Goodwin s role in this would later become a Harvard Business School case study in successful integration It also earned Goodwin the Forbes Global Businessman of the Year for 2002 and the admiration of New Labour and the Prince of Wales So the Shred wasn t born with a silver spoon and didn t acquire an army of sycophants without demonstrating his Midas Touch during his early days But it convinced him acquisitions would keep the share price rising, ending with the fateful decision to buy ABN Amro in 2007 In total RBS made 27 acquisitions on his watch, most of them a vain attempt to take on Goldman Sachs, JP Morgan and Citigroup in their own backyard By 2006 the bank s American subsidiary, RBS Greenwich Capital, had become the second biggest issuer of sub prime securities worth 99.3 billion behind only Lehman Brothers Fraser unearths quotes from Goodwin on 1st March and 5th June 2007 stating RBS did not get involved in sub prime lending, even though he must have known by November that year just how much exposure the bank had to a weakening US housing market Was this disingenuousness, denial or deception One of the obvious lessons from the crisis is that the regulatory authorities should have done to prevent a bank like RBS getting out control The bank s adherence to the International Financial Reporting Standards FRS method of accounting helped it hide up to 32 billion of shaky assets, allowing poor performing loans to go unreported Likewise, the Clinton administration s passage of the Commodity Futures Modernization Act which banned the Securities and Exchange Commission from regulating derivatives created the conditions for casino banking to flourish The arch capitalist Democratic President also loosened the Glass Steagall Act of 1933 that had been in place to separate Retail and Investment banking Even the most trusted central banker of modern times, Alan Greenspan, must rue his decision to lower interest rates from 6.5 percent to 1 percent in the immediate aftermath of 9 11.But RBS, despite its global pretensions, remained a Scottish bank to the core and reaped the benefits of Margaret Thatcher s Big Bang in 1986 This remains one of the most ambitious bonfires of regulation in the history of modern capitalism and led to an orgy of mergers and acquisitions following the dismantling of exchange controls Goodwin and RBS were one of many beneficiaries of the light touch regulation continued by Blair and Brown in the late 1990s and early 2000s Once again Fraser produces an impressive array of quotes from New Labour s leaders praising the minimum supervisory role of the FSA The bonanza of Corporation Tax produced by financial taxes represented 13.4 percent of the entire take in 2007 67.8 billion no wonder Gordon Brown claimed his Cabinet had abolished the boom and bust cycle.In essence the tale of RBS is a depressing story of arrogance and myopia where institutional investors did nothing to hold the bank to account As a listed company, RBS came to be dominated by a smaller pool of shareholders with ever larger stakes The pressure to increase Returns on Equity, pay higher dividends and boost the share price granted power to short term over long term interests Goodwin feared his bank would be in play as a takeover target if it did not go along with an aggressive expansion As Fraser points out, an astonishing 94.5 percent of shareholders voted for the disastrous 71.1 billion acquisition of ABN Amro in August 2007 as part of a consortium with Santander and Fortis Surely this now ranks as one of the most insane decisions taken by a listed company in the last four hundred years.Shredded Inside RBS has won prestigious accolades from Bloomberg, the Huffington Post and The Week, but Goodman Sachs must be relieved they no longer sponsor the FT Business Book of the Year, for which this made the longlist Their scandalous handling of the RBS 12 billion rights issue in October 2008 leaves them with little integrity Indeed, Fraser reveals how Goldman passed on shares it was under writing to a group of hedge funds intent on short selling RBS Critics believe this outrageous disloyalty might even have contributed to the share price dropping below 200p The mere chance it could have put the whole rights issue in jeopardy shows a breath taking betrayal of trust from the world s most famous investment bank and is one of many revelations Fraser uncovers in his monumental study Former RBS Economist, Alex Salmond, is also quoted in a sycophantic letter to Goodwin praising the globe trotting success of the bank and its importance to Scotland s economic identity.At 608 pages, Fraser has left us with a gripping account of the bank that nearly blew up the British economy And eight years later RBS is still a noose around the taxpayer s neck A Moneywise survey in 2015 named it the least trusted bank in the UK due to its appalling customer service and complaint handling Numerous lawsuits remain outstanding from manipulation of LIBOR and rigging the foreign exchange markets to the scandalous behaviour of its Global Restructuring Group, where thousands of small businesses allege the bank pushed them into bankruptcy to buy up their assets on the cheap for future profit The sad truth is Britain would be better off without RBS, but its sheer size makes it too important to fail Ian Fraser is in no mood to temper the moral outrage, but perhaps glosses over some of the bank s early successes during the Millennium In that regard Shredded Inside RBS is the right book at the right time for our epoch and is guaranteed a long print run Aside from the poor taste of the cover artwork and populist title, this is a serious piece of work aimed at both the aggrieved taxpayer and FT reader.


  4. says:

    For an inside view of what and how RBS imploded, and to get insight into why the GFC occurred get hold of this book.Fraser also looks into the unprecedented orgy of speculation and debt that created the GFC and left banks and finance houses around the world stranded.Interestingly though very few of the executives involved in this went to jail, most kept their bonuses and huge pay cheques and some are still in banking and finance.It seems we ve learnt nothing and while regulations and regulators have improved we are not really that much further along.


  5. says:

    Gripping tale of greed, narcissism and megalomania A horror story of what happens where there is weak governance and lack of oversight This is an absolutely shocking book and begs the question have we learned anything


  6. says:

    The title of this book is rather melodramatic because RBS was only one of numerous banks worldwide that believed their own hype and bonuses to believe that they were kings of the financial universe and geniuses in a world that mere mortals could not understand RBS was simply one of the worst examples of corporate greed and hubris Ass Warren Buffet the legendary investor has said when the tide goes out you discover who has been swimming naked This book exposes in particular the names in RBS and the wider financial world of those who were skinny dipping.If you don t know your Collateralised debt obligation from your credit default swap don t worry neither did most of the executives that ran the financial organisations that went bust in 2008 All they knew was that they seemed to be making money and most importantly they were banking huge bonuses Not surprisingly when it all went wrong the bankers , so called regulators , politicians , and the various leeches who had benefited until the crash , all simply disappeared to spend time with their families and time counting their money.This book reads like a financial who dunnit and kept me turning the pages relentlessly as RBS run by a bullying CEO namely Fred Goodwin , having made one successful takeover of Natwest and then buoyed by his own PR believed that he was bullet proof and proceeded to over extend the bank until it all ran into the buffers and he had to go cap in hand to the government sorry the taxpayer in order to be bailed out On the way up all the familiar warning signs were there such as huge glossy new headquarters , suites at the Ritz , Mercedes S black limousines , trips to Formula 1 , gung ho press briefings , mad takeovers , overpaid executives and so on On the way down the guilty parties got off Scott free apart from one scapegoat an RBS executive who was thrown to the wolves although I don t think he is living on the benefit What happened to the politicians Blair and Brown and regulators who joined the party and encouraged the financial hysteria Was it their fault Of course not it was somebody else and they all moved on to other jobs or a secure pension funded retirement Alistair Duncan the Chancellor at the time comes out of it pretty well but he is an exception.Have the lessons been learned Of course not Many committees and reports later and in time 6 years later nothing has really changed Don t believe anyone who tells you that bankers and their associates are especially talented and need excessive pay They are especially talented at making a quick buck ripping off naive investors and riding off into the sunset.A sobering brilliantly detailed and well researched book.


  7. says:

    Shredded is thoroughly reported and at parts feels a bit overly so most of the book is basically a sustained critique of banks, bankers, banking regulators, Basel banking regulations, politicians, etc It is not especially balanced, having said that, the reporting is quite solid and unearths a lot of behind the scenes detail as to how Fred Goodwin ran RBS to the ground Though there is a lot color, conceptually there is not that much new the same villains are there megalomanic CEO, weak board, ineffective and indecisive regulators, loose monetary policy, bull market sentiment, perverse incentives, etc, etc What does seem unique to RBS besides scale is perhaps its having gotten one big acquisition right NatWest , making the managers over confident about subsequent ones Chapter 33 was to me the most interesting In C33 the focus is on SME customers who saw their livelihoods and life s work destroyed by RBS bankers who would arbitrarily call loans or revalue collateral, forcing an otherwise surviving business into default, in order to seize the collateral at fire prices and sell it for profits This sort of thing was sustained and arguably even encouraged under Hester above whose tenure I had not known much before as RBS was then loss making and needing to clean up its books the lesson is that even as a bank is shrinking, it can do so in anti social and cynical ways I had not understood this side of it before.


  8. says:

    How to Rob UK citizens and get away with it Why aren t they all in jail serving long sentences So much for David Cameron making all the noises how bankers will be dealt with What have you done Mr Cameron nothing I am shocked and horrified by the grotesque attitudes of those supposedly responsible of lax attitudes towards risk If Goodwin was a tyrant to the extent mentioned then those that should have challenged him are just as complicit Politicians Investors and shareholders you are all guilty It s ok when the money s rolling in nothing matters, everyone is great But, when the shoe is on the other foot funny how they have all blended in to the background , leaving everyone else to pick up the pieces Conveniently, tax payers money saves the day never to be seen again Goodwin and his cronies are biggest scoundrels going who have got away with daylight robbery, sending out the wrong messages to everyone in the financial industry Hester the jester is no better, deals behind closed doors that on the face seem good but again abuse the very people that saved the bank Why does this country reward failure Because, we got no balls to stand up to and deal with those that really need bringing to book for fear of not attracting the right people Utter rubbish.


  9. says:

    It is good but not that good For all the thorough research and the impressive excoriation of Goodwin it has surprisingly little original analysis It s pretty forthright but not passionate enough, losing it s impact in the wash of detail It comes to certain half hearted conclusions, which seem to suggest that it was everybody s fault so no one is too culpable If this is the best we can do as a polemic on a fundamentally dysfunctional financial system then we are in trouble.


  10. says:

    This isn t so much a book as a data dump I m not sure any editors were involved in the making of this project, which appears to be a collected set of journalistic notes about RBS, haphazardly divided into chapters with a massive amount of repetition.As for the contents It s worth reading if you re interested in global banking otherwise you an skip this.


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