02 Dec Fred Goodwin implicated in Libor Scandal
Former RBS chief Fred Goodwin has now been implicated in the Libor
Fred Goodwin implicated in Libor scandal
by Jamie Mann
Former Royal Bank of Scotland chief Fred Goodwin has been implicated in the Libor scandal after his right-hand man at the bank said that the CEO had “played with ideas” regarding the benchmark rate at an executive meeting, the Herald Newspaper reported.
In front of a Parliamentary inquiry, Johnny Cameron, former investment banking chief, said Mr Goodwin had a “frank exchange of views” over Libor with colleagues as the bank sat on the precipice of the 2008 financial meltdown.
RBS apparently upheld a “moral culture” during Mr Goodwin’s leadership, according to Mr Cameron, who was grilled alongside his successor, John Hourican (who has already resigned ahead of the £390mn Libor manipulation fine) and RBS Markets CEO Peter Nielsen.
Mr Hourican, who held his role from 2008 said: “When we took control of the bank it had had a cardiac arrest. We had to prioritise dealing with the existential threat to the bank.”
He told current RBS staff to learn from its “death”, while Sir Hampton insisted that the former executive was not a “human shield”, with the involvement of 21 staff having already been brought to light.
Mr Cameron is the only executive to face action from regulators following a banishment from senior roles by the Financial Services Authority and said that there was little which could have been done to prevent Libor rigging during his time.
Defending the tenure of the Edinburgh-based bank, he said: “You cannot impose moral standards on people who do not wish to be moral.”
Key players in the current generation of RBS, including Chief Executive Stephen Hester and Chairman Philip Hampton apparently justified clandestine Libor-rigging with the latter insisting that repaying the £45bn taxpayer bailout was prioritised.
The trial acts as a sequel to last year’s public outrage regarding RBS bonuses following their role in the 2008 UK banking collapse and Libor-rigging, with the depth of the bonus pool emerging within days.
However, the bank would not reveal to the commission the sum without the reduction following a Libor fine.
Sir Hampton has defended Stephen Hester’s “modest” bonuses, which can reach up to £6m annually, ahead of his £1.1 salary. The chairman said that Mr Hester was paid “well below the market rate of people working in banking”.
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