British Taxpayers Are Not to Be Messed With

In Britain, they do not joke around. The former chief executive officer of the Royal Bank of Scotland, Fred Goodwin, was stripped of his knighthood by Queen Elizabeth II Wednesday as punishment for his role in the 2008 financial crisis. The title was originally given to the banker in 2004 for his services rendered to the banking world. He will be the 35th person to be deprived of the title Sir since 1995. The RBS, which had to receive 45.5 billion pounds worth of aid during 2008 and 2009, has been identified as one of the main drivers behind the 2008 financial crisis. Throughout the crisis and the events leading up to it, Goodwin was the bank's primary decision maker. During the crisis of 2008, the RBS and Lloyds TSB received billions of pounds in taxpayer money from Her Majesty's Treasury. In exchange, the British government was given shares in the two troubled banks. By the end of 2008, the RBS had lost a record 24.1 billion pounds, with Goodwin announcing in October of that year that he would be stepping down as CEO. In 2009, losses – though still significant - dropped to 3.6 billion pounds. Goodwin's loss of knighthood was widely reported in Britain. Coverage often noted the historical prestige of knighthood in British society, and that the title carries with it a sense of responsibility. Clearly, the concept of public responsibility is different in Britain than it is in Italy, where I live. Here, politicians can survive even sexual scandals. In Britain and the United States, sexual scandals can easily ruin a political career. Former British Secretary of State for War John Profumo's affair with the alleged mistress of a Russian spy in the 1960s is still recalled with disdain in Britain, for example. It is much the same way for financial scandals. The case of RBS, however, is more particular: this is not fraud or scandal. Instead, Goodwin stands accused of wasting taxpayers' money. The British press tends to use the word taxpayer when it comes to government intervention, at every level. It is a simple concept many in Italy have forgotten: the government's money belongs to the citizens and the taxpayers. The political and managerial class of a country is accountable only to them. In Britain, the idea of "state intervention" is not as emphasized, and the most important matters are how much the taxpayers had to pay for the intervention and whether the use of these resources was justifiable or not. Needless to say, there is a remarkable difference between the Italian concept of res publica (a Latin word that means “public good”) and the disrespectful treatment Italian taxpayers have received by those whose duty it supposed to be to defend them. As the fictional London detective Sherlock Holmes might say, the importance of this should be “elementary, my dear Watson.” Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.