SIR SHED and NATIONALISATION

The revelations that British banks have been favouring foreign companies over British ones has added to the government’s aggravation with bankers. The cries for the entire banking sector to be fully nationalised - and certainly the Royal Bank of Scotland which the government now virtually owns – have become shrill.

The shocking news from RBS – whose shares have fallen from more than £6 each to around 11 pence – and the slamming articles which consumed every British newspaper yesterday about its shamed former boss Sir Fred Goodwin, known as Fred the Shed because of his habit of shedding staff – has brought the City and the banking fraternity into a degree of disrepute that could never have been imagined a few months ago.

The massive failure of RBS – and its entire Board not just Goodwin should hang their heads in shame – has sent shock waves through the financial and political establishment. Its losses of £29bn are the biggest in banking history. They were caused by a disastrous takeover of banking conglomerate ABN Amro just as the crunch kicked off, investment in the poisonous US property market and backing a Russian oligarch. Barclays – not unambitious itself – pulled back from the ABN deal. But Shed & Co. ploughed on.

Yesterday The Times called for the outright nationalisation of RBS. Its collapse has blown a massive hole in Scottish Nationalist plans and their so-called financial strategies. It will be a long time before Edinburgh regains its reputation for financial prudence. A loss of £28bn represents almost a third of Scotland’s entire output.

The Daily Mail accused Shed and RBS managers of ‘ incompetence on a truly gargantuan scale.’ It ran its leader next to an article by its city editor, Alex Brummer, headlined
‘ Hubris, overarching vanity and how one man’s ego brought banking to the brink.’

Shed’s pension pot is £8.4 million. It works out at more than £500,000 a year. Some MPs have demanded that he repay the money and be stripped of his knighthood.