Our speaker was Tony Burkitt who came through the fog from Burley-in-Wharfedale to talk about RBS, the credit crunch and “me “. Tony worked for Royal Bank of Scotland for many years but retired before the era of Fred Goodwin. The bank was set up in 1727 to rival the Bank of Scotland which was thought to harbour Jacobite sympathies. As late as 1992 the Chief Executive before Goodwin sold Charterhouse as he did not believe that retail and risky investment banking went together. The ethos changed with Goodwin’s arrival. A successful merger with the much larger NatWest made Fred Goodwin something of a megalomaniac, opening a vast new HQ in Edinburgh and disastrously purchasing the Dutch bank ABN Anro. In 2008 shares plunged from £17 to 10p. The causes of the global 2008 crisis can be traced back in the UK and USA back to the 70s and 80s when owner occupation and light regulation of the banks were encouraged. Bill Clinton’s role in encouraging sub-prime mortgages in the USA led to the fall of “Fanny Mae and Freddy Mac”. Worst of all was the financial engineering encouraged by investment in derivatives.
Tony explained a complicated subject as clearly as anybody could in 1 hour. Neil Ramshaw, who has experience in the same field, gave an excellent vote of thanks.