Will Obama pay Goodwin's pension?

BlondeHeadOn

Interesting article from Robert Peston today, linking RBS with AIG insurance:

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

"Only yesterday, or the day before, financial globalisation was supposedly about making sure that capital was transferred to those parts of the world that could invest it most productively.

That so much of the exporting nations' surpluses in effect ended up going to ex-cons and former bankrupts in middle America, in the form of subprime loans, rather exploded the idea that only good could come from the unfettered flow of capital across borders, as channelled by brilliant investment bankers.

Today's iteration of financial globalisation is - in part - about clearing up the mess left behind by the bankers' extended party.

Here is a topical example of the detritus that still needs to be cleared up: the bill for Sir Fred Goodwin's £703,000-per-year pension.

Now the government is mad keen for Royal Bank to retrieve some of the cost of this pension through legal action - and, as I disclosed the other day, Royal Bank is taking advice from leading counsel on whether resorting to law could recoup a bob or three for the bank and its owners......

.... If there were any potential liability and if it were to rest with Royal Bank's former directors or with Sir Fred himself, they would probably be protected under the specialist insurance policy taken out by all directors of big companies, what's known as "directors and officers insurance" (D&O).....

Which insurance company was a global market leader in D&O cover?
You guessed it: AIG, the crumbling insurance giant, recipient of almost $173bn of financial support from US taxpayers, and 80% owned by the US state.

In this instance, Royal Bank's D&O cover came from a panel of insurers, of which AIG was one: AIG is liable for something less than 10% of any claims made against RBS's former directors....

There is a wonderful resonance bout even the possibility that AIG could find itself picking up some of the bill for Sir Fred's pension - because in a way it would mean that US taxpayers, as represented by President Obama, would be helping to finance the most controversial pension in British corporate history.

It's another illustration - not the most significant, by any means, but one of the more striking - of how financial globalisation took a wrong turn."



Not sure whether all this is true, but it's an interesting consequence!

bubblesmoney

more important than recouping some money is giving some serious jail time for those that perpetrated the charade that bankcrupted the biggest institutions.

there has to be some serious investigations into fraud and misrepresentation and racketeering that was most probably done by these derivatives traders and investors and sellers. the article i linked is about AIG but the same could be extended to other big companies that perpetrated the charade in their annual statements or press releases about their companies not being involved in subprime assets (aka RBS) while infact they were involved in that. this is fraudulent misrepresentation to investors and share holders about price sensitive information. game set match. put leg irons on these chimps and give them serious jail time. will probably deter such attempts at defrauding investors in future???

can we expect the UK govt to even consider fraud investigations against these institutions and directors. fat chance of that happening with the present lot in power because their !!!! is on the same sling.