Alex Salmond regrets past support for banker Fred Goodwin

First Minister Alex Salmond says with hindsight things would have been different

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First Minister Alex Salmond has told BBC Scotland he regretted his previous support for the former Royal Bank of Scotland boss Fred Goodwin.

Mr Salmond wrote to him when he was the bank's chief executive offering the Scottish government's assistance in the takeover of Dutch bank ABN-Amro.

That takeover contributed to the bank's massive losses and the need to bail it out with £45bn in taxpayers' money.

Mr Salmond was speaking after Mr Goodwin was stripped of his knighthood.

The SNP leader said that with hindsight he would have done things differently.

The Queen cancelled and annulled Mr Goodwin's title on the advice of the forfeiture committee - whose members include top civil servants and the head Treasury lawyer - in a decision welcomed by party leaders.

The move has been widely criticised by business and political figures, including ex-Labour Chancellor Alistair Darling who said the decision appeared to have been taken "on a whim".

Mr Salmond said that, while the decision to remove the knighthood was correct, he suspected the UK government had used the news to divert from the serious issues with the economy.

Here in one of Scotland's smartest suburbs there is some sympathy for Fred Goodwin.

He was last seen late on Tuesday afternoon, sweeping out through the electronic gates of his large house in The Grange in a black Jaguar.

There are plenty of bankers behind the high walls of these tree-lined streets who feel that Mr Goodwin's treatment has been harsh.

Yes, they say, he was an arrogant, hubristic dealmaker but at a time when arrogant, hubristic dealmakers were all the rage, feted by many of the same politicians who are now cheering his downfall.

As RBS chief executive, Mr Goodwin cemented Edinburgh's reputation as a financial powerhouse, to the delight of staff and shareholders who grew rich, on paper at least.

The Treasury was more than happy to take and spend the millions of pounds in taxes paid by RBS.

For others though, including some of the more old-fashioned bankers in the Scottish capital, many of whom lost fortunes when boom turned to bust, Fred Goodwin deserves the opprobrium.

He was the epitome, they argue, of what went wrong with banking, helping to turn an industry with a reputation for being safe, solid and secure into a casino.

Either way, when the crash came, the man who was Sir Fred had the furthest to fall.

The first minister said: "While the decision is correct let's have a statement of what are the criteria for people in the financial sector, first, keeping honours - if they were involved in the financial collapse. Secondly, how about wider across society?

"I mean what are the criteria by which people retain seats in the House of Lords who have got serious criminal convictions?

"Now, if you start down this road, and this road has now been started down, then there are a lot of folk who want reasonable answers to these questions.

"I don't see any consistency of approach coming from the Westminster government and in particular that gives me the great suspicion that what we have here is a dreamt-up, convenient, media diversion."

Mr Salmond added: "What is the diversion from? The serious issues in the economy and secondly, of course, the question of how you justify in the public sector the mass of workers being offered one settlement and people in the financial sector, who are in the public sector, being offered quite different circumstances."

Asked about the support he gave to Mr Goodwin when he led the bank, Mr Salmond said he would done "things differently".

He said: "If we all had our time again we'd look at things differently. I think there are very few people who can justifiably say that they anticipated the full extent of the financial collapse - the financial crisis.

"I mean I know some people claim they did but I think if you examine the record you'll find there's very few people on the planet - and I am certainly not one of them - who anticipated it.

"So, yeah, of course, if we had the benefit of hindsight we'd do things differently and I am sure that is true of lots and lots of people."

Racing champion

Scottish Labour leader Johann Lamont said the first minister had to apologise for backing "light-touch regulation" in the Scots financial sector, during the 2007 Holyrood election campaign.

She welcomed the first minister's comments about Mr Goodwin, but added: "Alex Salmond should really apologise for his supporting even lighter bank regulations.

"Labour has already apologised for not being tough enough on the banks, and it is time the SNP did the same."

There had been a clamour for Mr Goodwin, who was RBS chief executive in 2008 when the financial crisis hit the bank, to be stripped of his title which was awarded for "services to banking" under the previous Labour government in 2004.

But the Institute of Directors has warned that the move was creating "anti-business hysteria".

Former Formula 1 motor racing world champion Sir Jackie Stewart - a friend of Mr Goodwin - said he thought the former bank boss had been made a scapegoat.

"No single person or even any single bank created the biggest financial recession in modern times," he said.

"To have this stripped, I think, is poor for the constitution and very dangerous for the future."

Alex Salmond letter to Goodwin Alex Salmond sent a letter to Fred Goodwin when he was head of the RBS

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