Raising the standard
The blame for the financial crisis should not be heaped on one individual but seen as a collective failure, according to the chairman of one of Britain's biggest financial firms as well as one of those in a lot of trouble.
Gerry Grimstone, chairman of Standard Life and of Candover private equity fund, has told ´óÏó´«Ã½ Scotland it is wrong for the public to heap the blame on Sir Fred Goodwin, former chief executive of the Royal Bank of Scotland.
"These are collective rather than individual failings," he said in an interview to be broadcast on Easter Sunday.
"The public look at this and find it inexplicable.
"Some astonishing things have happened.
"We have to educate people as to the causes. It's more complicated than saying it's all down to one man".
He went on: "I'm sure they weren't driven by greed, and it's easy now to say they were reckless.
"People get caught up in the spirit of the times. It's easy now to see that spirit has changed.
"But go back to the press comment at the time, and everyone was going along with this.
"It looks dreadful now, and I'm not in any way trying to minimise it.
"As chairman of a big financial services company, I feel very accountable about all of this. It's become a very big job, rightly, being on the board of a financial services company".
Mr Grimstone was speaking in China, during a visit on behalf of Edinburgh-based Standard Life, in which he is accompanying First Minister Alex Salmond.
He said the safety of customers' savings must be top priority in the radically changed future of financiers' responsibilities, and that he doesn't think banks have to be broken up in response to crisis in the sector.
"But the taking of deposits puts a profound responsibility on an institution, and safety has to be paramount," he said.
"It's for the institutions to focus on this. It's a return to more old-fashioned ways, which isn't a bad thing."
In an interview to be broadcast on Radio Scotland's 'The Business', the financier said the impact of the crisis is going to impact profoundly on living standards and on the way the sector works.
He went on: "The financial landscape is going to look very different after this.
"I don't think anyone is quite sure yet how different that landscape will be and what it will look like.
"We're going to have much tougher regulation. Boards are going to have to be alert to their responsibilities. The impact on customers must be forefront in people's minds.
"There's going to have to be a lot of changes in the financial services industry. I think people will become more cautious because of this, and rightly so."
Mr Grimstone is currently seeking a replacement to Sir Sandy Crombie as chief executive of Standard Life.
He said the search is global as much as it is looking internally, indicating that the life assurance company may be looking to expand its horizons.
Could it be Sir Fred Goodwin for the top job?
"I think that's very unlikely," understated Mr Grimstone.
You can hear Glenn Campbell's interview with Gerry Grimstone in special coverage from China on 'The Business', ´óÏó´«Ã½ Radio Scotland, Sunday 12 April at 10am.
Also available on 'The Business' weekly podcast.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ´óÏó´«Ã½ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 11th Apr 2009, mekquarrie wrote:Have to agree. Sir Fred is clearly an avaricious man (heaven forbid we use a moral word like 'greedy'), but those who could have controlled him and his ilk ran with the pack. Now they (and 'they' are many) find virtue in pointing and appointing blame. The ladies (and gentlemen) do indeed protest too much...
Complain about this comment (Comment number 1)
Comment number 2.
At 11th Apr 2009, willieuk wrote:Mr Grimstone misses several points in my opinion.
I think "Fred" was smoking his own dope. How else can you explain such an all encompassing cock-up that is RBS.
The blame must lie fairly and squarely on his shoulders.
The greed and stupidity of the man is awesome and is reflected by his determination to hang on to his massive pension. I am certain that if he had walked away with a moderate settlement and a well meant "sorry" he would still be in his Edinburgh home and able to shop locally.
As it is, it can only be time before "a goodwin" enters our language to mean something completely different.
Complain about this comment (Comment number 2)
Comment number 3.
At 11th Apr 2009, Wee-Scamp wrote:Standard Life is another financial services company that has effectively isolated itself from the rest of the Scottish economy.
Like RBS it won't invest in start-ups and spin-outs and doesn't believe it has any role to play in broadening and growing the Scottish economy.
Complain about this comment (Comment number 3)
Comment number 4.
At 11th Apr 2009, crazyislander wrote:I can smell the stench of an attempt to re-write history here. To suggest that we are in some way wrong in blaming Goodwin for all the ills that have beset RBS and the economy generally is outrageous.
This man took a huge and highly respected financial intitution and drove it into the ground. It doesn't matter that his fellows on the board of directors went along with it. After all, we know what happened to anyone who dissented from the boss's viewpoint.
Sir Fred Goodwin failed to do what ALL company directors are bound to do by companies law and that is to be duly diligent in the running and administration of a company. He alone was guilty of the mess and failure of the bank. It functioned entirely as a reflection of his will. Why has he not be called to book for not doing due diligence? Too many tales to tell in open court perhaps?
The country and the world is right to level ire upon this man, this fabulously wealthy man who will become even more fabulously wealthy at the expense of the tax-payer.
The government has done little to deal with this situation yet it does not even blink at prosecuting some poor sod who has 'overclaimed' a few lousey quid from the 'social'.
Whilst i do NOT condone the acts of vandalism against his Edinburgh home I cannot for the life of me summon up any sympathy for him. After all, in the end, would a humble suburban mansion be really suitable for a multi-millionaire??? I bet his millions will not be languishing in the Morningside branch of RBS making a mere 0.2% interest (current RBS tracker savings rate).
So, is Goodwin to blame for our current woes? Yes, of course he is. Is he alone? NO he isn't but he must be up there amongst the worst of the greedy, grasping, sustained growth and profit upon profit creatures who led us all to this cliff-edge. If we go over that cliff, I hope he and his like go first.
Complain about this comment (Comment number 4)
Comment number 5.
At 13th Apr 2009, garbhein wrote:I suspect that our government, enthusiastic supporters of deregulation and multiple home ownership and the love of money will be leading the charge over the cliff. Will enough lemmings follow them?
Complain about this comment (Comment number 5)
Comment number 6.
At 16th Apr 2009, nottoonear wrote:"We have to educate people as to the causes. It's more complicated than saying it's all down to one man".
I suggest they start getting to grips with their own education first and their own professional reponsibilities before they slag off the general population.
He went on: "I'm sure they weren't driven by greed, and it's easy now to say they were reckless.
Even the employees recognise it was greed, greed and more greed.
"People get caught up in the spirit of the times. It's easy now to see that spirit has changed.
What a load of patronising *rap. Due to the self-discpline and intelligence of part of society some of us are still solvent (both morally & financially).
I wholeheartedly agree with #4 crazyislander
Complain about this comment (Comment number 6)