Former governor of the Bank of England warns that City must not become complacent to risks in financial system
Mervyn King, former governor of the Bank of England, has warned the City will have another Fred Goodwin figure unless the banking system is overhauled.
Mr Goodwin was blamed for the near-collapse of the Royal Bank of Scotland (RBS) in 2008, when it was forced to accept a £45bn taxpayer funded bail-out. The ex-RBS boss had grown the bank to the fifth largest in the world before it crumpled under the weight of its huge exposure to the sub-prime mortgage crisis in the US.
Lord King said the City risked becoming complacent to the risks in the system by scapegoating Mr Goodwin.
“If all we do is think that Fred Goodwin was to blame, the big risk of that is that we say, well, Fred Goodwin has gone now so everything will be all right. But it isn’t,” he said, speaking at the Hay Festival. Read more