RBS: Inside the Bank that Ran Out of Money (full one-hour documentary)

RBS Inside The Bank That Ran Out of Money is a major television project on which I worked as both researcher and consultant

RBS Inside the Bank that Ran Out of Money, a one-hour BBC Television documentary, seeks to get to the bottom of the biggest bank failure in history. The one-hour film, produced by Tony Nellany and directed by Colin Murray, was first aired across the United Kingdom on BBC2 on Monday, 5 December 2011, but received its premiere on BBC One Scotland on 17 October 2011 — on the third anniversary of the RBS collapse and £45.5 billion taxpayer-funded bailout.

I was researcher and consultant on the programme, a task that involved conducting scores of interviews with numerous former RBS bankers, investment bankers, regulators, advisers, competitors, journalists/commentators, bank analysts etc; persuading a number ex-senior Royal Bank of Scotland insiders and others to appear in the programme; a fair amount of desk research; and moulding the final script.

Here’s what reviewer Leo Robson said about the programme in the Financial Times.

RBS Inside the Bank That Ran Out of Money (BBC2 Monday) was [a] talking-heads voiceover documentary that laid bare a tortuous story with great clarity and concision. The villain was Sir Fred Goodwin, and those testifying to his guilt included those who had put him into power…

I’d like to thank all those who agreed to appear. Those interviewed on camera in RBS Inside The Bank That Ran Out of Money included RBS’s former chairman and chief executive Sir George Mathewson, former chairman of retail banking Gordon Pell, former chairman and chief executive of corporate and investment banking Iain Robertson; former chief executive of wealth management Cameron McPhail; former non-executive director Cameron McLatchie, former group chief economist Jeremy Peat, former group head of media relations David Appleton and former chief executive of Bank of Scotland Sir Peter Burt.

There are also interviews with financial journalists and commentators who closely tracked RBS at the time, including Peter Thal Larsen, former Financial Times banking editor, Gillian Tett, US managing editor of the Financial Times, Jill Treanor, City editor of The Guardian and Daniel Gross, economics editor at Yahoo! Finance and co-host of the Daily Ticker.

They discuss the culture at RBS and the wider banking sector, the Edinburgh-based bank’s strategy as it strove to become the world’s largest bank, its over-leverage and risk-taking, and the shocking mistakes and corporate governance and risk management failures that precipitated its collapse, including the hoarding of toxic CDOs by Connecticut-based subsidiary RBS Greenwich Capital, and the €72bn acquisition of Dutch bank ABN Amro. Fred Goodwin, who as chief executive in 2000-9 was ultimately responsible for these disastrous moves, declined to be interviewed for the programme.

I’d also like to thank all my colleagues in the BBC production team for their patience and excellent programme-making skills.

RBS Inside The Bank That Ran Out of Money features previously unseen footage from Goodwin’s last meeting with shareholders, held in the Assembly Hall of the Church of Scotland on 20 November 2008. At that meeting private shareholder Mr Blackie asked Goodwin to apologise for the carnage he had caused, saying “I would like to hear you say sorry”. Broadcast cameras were not allowed into the meeting, but we obtained footage of Goodwin’s apology. The Paisley-born accountant responded:-

“Well Mr Blackie. Wouldn’t want there to be any doubt: I am extremely sorry … I echo the sentiments and – I am extremely sorry – extremely sad to be leaving the company at these extremely difficult times… there can be no question other than that I am extremely sorry…”

RBS Inside The Bank That Ran Out of Money also features footage of Goodwin and RBS head of investment banking Johnny Cameron insisting that the bank was not involved in subprime (a claim that was subsequently shown to be untrue). The same can be said of RBS’s claim, made when it was seeking to raise £12 billion of fresh capital from investors in April 2008, that it had sufficient working capital to survive for another 12 months.

A host of other players must also share the blame for the failure of RBS, including institutional investors who should have done more to rein the bank in, auditors Deloitte who went along with ‘racy’ acquisition-accounting methodologies (and who rumours suggest were “bullied” into signing off the bank’s 2007 accounts), credit rating agencies Standard & Poor’s and Moody’s who gave highly toxic CDOs AAA ratings, and central banks which kept interest rates too low for too long and whose faith in the ability of securitisation and derivatives to remove risk from the financial system was wholly misplaced.

In the end of the day, however, there was one guy at the helm at the time RBS was driven full steam into the iceberg. Fred Goodwin

• Further details about the production RBS Inside the Bank that Ran Out of Money
• Financial Times review of the programme
• Lew Rockwell blog on the programme