The RBS Tragedy

It is a tragedy that another 9,000 job losses are to take place in Royal Bank of Scotland in its back office operations within a division known as “Group Manufacturing”. The “Group Manufacturing” services comprise document processing, information technology, procurement and bank property.

There appears to be no announcement yet for reductions in the departments responsible the £7.3bn loss as part of 2008’s overall loss of £24.1bn. The overall loss required a huge injection of government capital in October 2008 to prevent the bank from outright collapse.

Since the bulk of the loss has been identified as a directly a result of the ABN Amro takeover the collapse of the bank can be fairly defined as the responsibility of the board and particularly the former CEO Sir Fred Goodwin.

The question which has to be asked is what positive action needs to be taken to prevent a business from being driven to destruction by a few. Light touch regulation by retired bankers is clearly not the answer.