LONDON — Sir Fred Goodwin built the Royal Bank of Scotland into one of the world's largest banks, earning a knighthood and walking away with a multi-million dollar pension as the bank collapsed.
But the former chief executive may still face a day of reckoning: an unusual movement wants to strip him of his knighthood, a rebuke usually reserved for criminals.
The movement has the support of British Prime Minister David Cameron, who says the Honors Forfeiture Committee will discuss the case this week. Deputy Prime Minister Nick Clegg says he sympathizes with demands that Goodwin lose his title.
The Daily Mail quoted opposition Labour Party leader Ed Miliband as saying that, "knowing what we know now," Goodwin should not have been knighted.
Goodwin, 53, is likely to retain his other title of "Fred the Shred," a tribute to his aggressive cost-cutting while expanding RBS.
In 2004, when Goodwin was honored by Queen Elizabeth II and became Sir Fred, RBS was lending generously and expanding, just like Britain's other big banks. In the bank's annual report for that year, Goodwin boasted of "strong income growth, improving efficiency, good credit quality."
Disaster came when Goodwin pressed ahead in 2008 with the takeover of the Dutch bank ABN Amro, paying a high price just as the credit crisis was starting to bite. RBS pursued the deal even though it had taken a writedown of 1.2 billion pounds ($1.9 billion) the previous year, mainly on bad loans in the United States.
Goodwin — who received his knighthood for services to banking — resigned in October 2008 as the bank was failing, provoking the public's ire by leaving with 16 million pounds ($25 million) in pension benefits.
The Cabinet Office declined to confirm reports the Forfeiture Committee was meeting Thursday. No decision is expected to be announced this week.
The committee usually acts against people sentenced to more than three months in prison for a criminal offense, or who have lost their professional license or been censured by a regulatory or professional body.
On Tuesday, Sir David Walker, former chairman of Morgan Stanley International, told a House of Commons committee that a report on RBS published last year by the Financial Services Authority amounted to professional censure of Goodwin.
The FSA blamed the RBS debacle on bad decisions, not dishonesty or any violation of regulations. It ruled out action against Goodwin, saying that an executive is not automatically accountable for everything that goes wrong, and that his conduct could only be judged against the standards of the time.
If he loses his knighthood, Goodwin will join a group that also includes the spy Anthony Blunt, Zimbabwean President Robert Mugabe and former Romanian President Nicolae Ceausescu.