City could have another Fred Goodwin figure

RBS building

Mervyn King, former governor of the Bank of England, has warned the City will have another Fred Goodwin figure unless the banking system is overhauled.

The Daily Telegraph reports that Goodwin was blamed for the near-collapse of the Royal Bank of Scotland (RBS) in 2008, when it was forced to accept a £45bn ($75.8bn) taxpayer funded bail-out. The ex-RBS boss had grown the bank to the fifth largest in the world before it crumpled under the weight of its huge exposure to the sub-prime mortgage crisis in the US.

Lord King said the City risked becoming complacent to the risks in the system by scapegoating Mr Goodwin.

'If all we do is think that Fred Goodwin was to blame, the big risk of that is that we say, well, Fred Goodwin has gone now so everything will be all right. But it isn't', he said, speaking at the Hay Festival.

'The system still needs reforming and there will be another person, whatever his or her name will be next time'.

To access the complete Daily Telegraph article hit the link below:

Mervyn King: City risks getting another Fred Goodwin 

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