Top critical review
Given his limited qualifications, the author has done a fair job, but a better qualified author would have been preferable.
on June 22, 2017
If you are a current or former RBS customer or employee angry at the way the scandal affected you, or a UK taxpayer angry at the scale of the bailout required, you will be greatly informed by the book. On the other hand, if you are looking for deep insight into the global financial crisis, you will be served poorly. First: the praise. The book contains a readable and credible account of what happened within RBS. It makes a good case that, whilst Goodwin committed many egregious errors, the blame for the fiasco does not lie with him alone. Mathewson, Cameron and McKillop within RBS and UK politicians and regulators have to share a fair bit of the blame. On the downside though (i) the account is extraordinarily parochial - it is essentially confined to RBS. The rest of the UK banking system does not feature very much and the global system features hardly at all. (ii) the author is out his depth in financial matters. CDOs are presented as toxic instruments, which may be fair enough, but he clearly does not understand them well enough to explain the toxicity. (iii) He is similarly out of his depth in the much easier concept of a rights issue. If a company offers its shareholders new shares at a price of 200p when the shares are currently trading at 363p, this is not a bargain for the shareholders. It is a signal that the company is in such a desperate situation that the management doubt that they could sell the shares at any higher price. (iv) The author lays great stress on the fact that Goodwin was an accountant rather than a banker, but one of the (many) catastrophic errors that he describes in the ABN Amro acquisition was an error for which a trainee accountant would be instantly fired. The acquisition was of a long-term asset, yet it was funded by short-term debt, exposing RBS to the risk (which eventually became fact) that they would not be able to refinance when the short-term debt matured. Given his limited qualifications, the author has done a fair job, but a better qualified author would have been preferable.