A UK government committee has found Fred Goodwin culpable for bringing Scotland's honour system into disrepute while at the helm of RBS.
Former Royal Bank of Scotland chief stripped of knighthood
LONDON // The knighthood awarded to former Royal Bank of Scotland Group PLC chief executive Fred Goodwin has been withdrawn after a U.K. government committee ruled that he brought the country's honour system into disrepute, the Cabinet Office said Tuesday.
The Forfeiture Committee said the "scale and severity of the impact" of Goodwin's actions while in control of RBS made it an exceptional case.
Goodwin was awarded his knighthood in 2004 for services to banking.
In 2008 the government was forced to inject GBP20 billion of new equity to recapitalize RBS, with subsequent increases in government capital bringing the total injection of taxpayers' money in the bank to GBP45.5 billion.
The committee said investigations from the Financial Services Authority and the Treasury Select Committee had made it clear that the failure of RBS played an important role in the financial crisis of 2008-2009 which, together with other macroeconomic factors, triggered the worst recession in the U.K. since the Second World War, imposing significant costs on British taxpayers and businesses.
"Fred Goodwin was the dominant decision maker at RBS at the time," the committee said. "In reaching this decision, it was recognised that widespread concern about Fred Goodwin's decisions meant that the retention of a Knighthood for 'services to banking' could not be sustained."