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  1. Wealth
December 7, 2010

Double whammy

By Spear's

Last week the FSA published their report into the disaster, not for the general public, but for their eyes only

England suffered a double-blow to its economy last week. First, there used to be a mighty, profitable and respectable bank called The Royal Bank of Scotland plc; then along came a lowly accountant called Frederick Goodwin who boosted the profits by firing anyone and especially everyone who got in his way, and he acquired twenty-seven companies and the sobriquet of Fred the Shred and a knighthood, and so he thought he understood banking. And he acquired a compliant chairman, called Sir Tom McKillop, who wasn’t a banker either.

Together, Sir Shredded Wheat and Sir Tom McCodswallop proceeded to blow up the bank, to the point that the bank is now known by the acronym RBS as there is nothing royal about it anymore: it is 87% owned by an unwilling UK-taxpayer who was shoe-horned into the rescue, who has also had to insure £325 billion of its so-called assets, of which more than half are abroad, mainly in the equally bankrupt state of Ireland. As the bank crashed and burned, Sir Tom and Sir Fred agreed each other’s monstrous pay packages, as Sir Fred stumbled out the door, tripping over a pension pot so big he couldn’t carry it away from the scene of the wreck quick enough.

At this point the FSA, charged with regulating banks, woke up at the noise of the biggest UK corporate crash of all time and realised that RBS no longer existed as an independent entity, nor even as a bank, but was now a basket-case, and on their watch too. Most of us would find it quite difficult to blow up a big international bank, and without the regulator noticing.

Last week the FSA published their report into the disaster, not for the general public, but for their eyes only: the trouble, you see, was that if they found that Sirs Tom and Fred were a couple of witless non-bankers who somehow found themselves running a bank for their own advantage and to the detriment of its shareholders, then it would have immediately provoked the question “What did, or didn’t, the regulators do about it?” And the answer was of course “Nothing!” So this toothless and clawless tiger, Tigrus Castratus, merely reported that “there was no failure of corporate governance, but mistakes were made”. No wonder there was a banking collapse like no other, while the FSA has already been consigned to the Cameronian garbage heap of ignoble and best-forgotten history.

Then up popped another acronym, this time in Zurich, where FIFA is the unregulated self-appointed oligarchic governor of world football. Here the English bid to host the World Cup in 2018 was immaculate, except for one vital omission: the judges, to their horror, found there was no brown envelope attached, so the bid was immediately booted into touch. The Russians understand bungs and elbow economics and were therefore the winners.

Sepp Blatter, FIFA’s equivalent to RBS’s McCodswallop, blathered on about how China, not England, had invented football and so it didn’t matter anyway: no doubt he’s got a couple of goal-posts from the Ming Dynasty era to prove it, or he will stand accused of pandering to the Panda-coloured black-and-white footballs much favoured at internationals. Just in case anyone had failed to follow the plot thus far, the 2022 host was announced as Qatar, where the average temperature is 50 degrees so they do camel-racing but don’t do football, but do have a lot of natural gas in the ground and a lot of money in the bank, including Harrods Bank, but not in the shredded RBS.

All of which nonsense reminds me of the inscription above the door of a little old courtroom in Southern California: ‘When the Fixes are Equal, May Justice Prevail’. This little double-whammy, however, meant a figure of many billions has been deprived to the English economy. There are consolations, however; the FSA has croaked; FIFA is discredited; we still have the unshredded remains of RBS; and the odds on England even qualifying for the World Cup in 2018 and 2022 were long, let alone winning it.

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We wish Sir Shredded Wheat, Sir Tom McCodswallop and Slop Blather – no chance of an honorary knighthood for him, but you never can tell! – a long and happy retirement, and trust they don’t end up ruining, sorry, running the IOC, or the next Winter Olympics will most likely end up in Ghana.

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