Rankin recalls RBS party for doomed deal
It was the notorious deal that brought the Royal Bank of Scotland to its knees.
Now crime writer Ian Rankin has revealed how he partied with its chief executive Sir Fred Goodwin and his staff at a lavish celebration at its vast new Edinburgh headquarters following its takeover of Dutch bank ABN Amro in 2007.
In a TV documentary, Rankin recalls thinking how the Gogarburn HQ was "almosta city in itself ".
Rankin said: “I was at a party there the night of the ABN Amro takeover that was going to make them one of the biggest banks in the world.
"It was almost a city in itself, a shiny edifice with its own coffee shops, supermarkets and hairdressers so the staff never needed to leave the premises.
"Sir Fred Goodwin and his senior staff walked into this party. It was almost like the start of Reservoir Dogs. They were almost walking in slow motion with a soundtrack playing, suits and ties, all walking in.
"We all clapped, we all applauded, because we thought it was great for Scotland and great for Edinburgh.”
The final part of the series The Years That Changed Modern Scotland recalls how the dramatic collapse of RBS in 2008 led to the bank having to be bailed out with taxpayers’ money by the then Labour government after the company warned it was hours away from running out of cash.
The collapse of the bank was widely blamed on the decision to buy ABN Amro during a mounting global financial crisis, with some commentators branding it one of the worst takeovers in history.
Goodwin, who had overseen the creation of the bank’s £350 million headquarters at Gogarburn, was forced to resign
after the bank’s near collapse in 2008 and was stripped of his knighthood in 2012.
The rise and fall of RBS is charted in the final part of the Kirsty Wark-fronted documentary, which will be shown on BBC Scotland tomorrow.
It features the unveiling of the Gogarburn headquarters by the Queen and featured a Formula 1 car racing through its grounds and an RAF flypast.
The documentary shows Goodwin boasting: "Why we are so successful is
we know the risks to take and we know how to manage the risks.”
The then chancellor Alistair Darling recalls how RBS’S expansion drive led to its downfall.
Mr Darling said: “In 2008, it was the biggest bank in the world and it was about the same size as the entire British economy.
“When I got a call in October 2008 from the then chairman who said that they were haemorrhaging money and what was I going to do about it,
I said: ‘How long can you last?’ He said: ‘We’re going to run out of cash this afternoon.’
"This was the biggest bank in the world and it was going to run of out cash in a few hours’ time.”
Rankin adds: "We were a world financial powerhouse and suddenly that all appeared to be built on sand.”
Mr Darling says: "Why did it happen? They took on risks they simply didn't understand. They got over-confident.”