Photo: Wikimedia Commons
Last month, we learned that RBS CEO Fred Goodwin would be stripped of his knighthood, something that usually happens to spies and dictators.Goodwin, who earned his knighthood for his banking accomplishments, has led a bank that has been forced to take huge bailouts from the government, much to the public’s disliking.
Outspoken SocGen strategist Albert Edwards is wondering why the UK should stop there. He notes that there are plenty of folks who earned their knighthoods for their financial accomplishments who subsequently led countries and institutions right into the financial crisis. From Edwards’ latest Global Strategy note (h/t FT Alphaville):
Terry Smith, CEO of Tullett Prebon, is a well known financial market commentator here in the UK. He wrote to the FT recently saying that if the mood is to strip knighthoods for those responsible for the credit crisis surely attention should now focus on the honorary knighthood bestowed upon Alan Greenspan in 2002, bestowed for his “contribution to global economic stability (!!!)‛ . But if this means we are now in the business of looking for scapegoats for our own home grown Great Recession, I believe Sir Mervyn King’s knighthood should be removed too.
If Fred Goodwin as CEO is held responsible for what happened to RBS, it goes without saying that Sir Alan Greenspan and Sir Mervyn King should also be held responsible. Alan Greenspan’s responsibility as chairman of the Fed requires little discussion in my view. My views on Mervyn King may be more controversial, but he has been in senior positions at the bank since 1991 as Chief Economist, then Deputy Governor, and Governor since 2003. He has been at the helm and should, in my view, bear primary responsibility for the UKs economic collapse. On the Cabinet Office’s own criteria ‚The scale and severity of the impact of his actions as CEO of RBS [Chair of the Bank of England MPC] made this an exceptional case.”