British government strips disgraced banker of knighthood (corrected)

Jan 31, 2012, 18:10 GMT

London - Fred Goodwin, the former chief executive of Britain's Royal Bank of Scotland (RBS), who became the symbol of the 2008 banking crisis, has been stripped of his knighthood, it was announced Tuesday.

The decision to revoke the title 'Sir' - which is a rare occasion in the British honours system - was taken by the honours forfeiture committee at the suggestion of the government. A statement said that Goodwin, 53, had brought the honours system into 'disrepute.'

Goodwin was at the helm of RBS between 2001 and early 2009. He resigned following a public outcry after the bank's collapse was averted by a massive government bailout, placing it effectively under state control.

Known as 'Fred the Shred,' Goodwin built RBS into a major global concern but also overreached himself by purchasing the Dutch bank ABN Amro in the immediate run-up to the crisis.

He was given the title for 'services to banking' in 2004 by the previous Labour government.

The former accountant, and son of a Scottish electrician, became a hate figure in Britain during the banking crisis, which saw RBS raking in the biggest losses in British corporate history.

While the removal of the title is purely symbolic , it could nonetheless be seen as a warning for others in the banking sector, analysts said.

Only on Monday Stephen Hester, Goodwin's successor at RBS, waived a nearly 1-million-pound (1.5-million-dollar) bonus after growing pressure from the British media and politicians.

In 2008, the committee withdrew an honorary knighthood held by Robert Mugabe, the president of Zimbabwe, in protest at human right violations under his rule.

Under Britain's honours system, titles are awarded by Queen Elizabeth II at the suggestion of the government.