Traders received multi-million pound bonuses after acquiring more than £30 billion of sub-prime assets during early 2007. Following these purchases the bank “didn’t stand a chance” of surviving unaided, one board director told this newspaper...
Sir Fred Goodwin, the former chief executive of RBS, is this weekend under pressure to disclose what he knew of the sub-prime trading.
He repeatedly put out statements to the City saying that RBS “don’t do sub-prime” even though traders were buying the sub-prime assets. RBS board directors suspect he may have acted negligently.
The system of annual cash bonuses encouraged bankers to buy up the assets with insufficient regard to the risks involved.
Sir Fred is under pressure to disclose whether he sanctioned the hidden deals or whether he too was unaware of the strategy.