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4.3 out of 5 stars
Making It Happen: Fred Goodwin, RBS and the Men Who Blew up the British Economy
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15 of 15 people found the following review helpful
on 3 May 2014
I did enjoy this book and it has been researched well in terms of the people. I think it does a good job of talking about some of the characters at RBS.

The book describes in great detail the investment bank, CDO's and acquisition of ABN Amro along with portraits of the people involved in these areas.

Then casually at the end of the book it is made clear that the majority of the losses were in property lending in the UK and Ireland. However up until that point there had been no mention of property lending or any of the people involved in that part of the business. I would have thought that the area of the business responsible for the largest losses should have been covered in some way. What happened? Who were the people involved?

Also in his conclusion he implies that HSBC was just as bad as HBOS and RBOS which is pretty unfair. Tax payers have not had to bail out HSBC. While the management of HSBC are not perfect they are in a different league to Fred Goodwin and company.

Overall, I think the flaw is that the author does not properly understand finance. I have also read "Hubris: How HBOS Wrecked the Best Bank in Britain" and "Anglo Republic: Inside the bank that broke Ireland" which in my view are better books because they properly explain what happened. After finishing Make It Happen I feel that I still don't completely understand what happened at RBS.
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25 of 27 people found the following review helpful
on 4 January 2014
A great deal has been written about the banking crisis of 2007-10, much of it of a similar dreadful quality to some of the assets on the RBS balance sheet in 2007. To my mind, two serious attempts have been made to document what led to the crash at RBS: the BBC documentary "Inside the Bank that Ran out of Money", and now Iain Martin's book.

Martin received co-operation from the Royal Bank. He interviewed the CEO and chairman, had access to RBS archives, and conducted off-the-record interviews with key current and former RBS employees. This book is largely a summary of those interviews, presented in a direct and unadorned style. If the Bank didn't want it to be written, they at least made the best of the inevitable. The resulting book is unbiased and reasonably sympathetic to the current RBS management.

Martin tackles the main areas leading up to the crash in roughly chronological order: the history of Scottish banking, the early career of Fred Goodwin, Sir George Mathewson's reform of the Bank in the 1990s, the NatWest takeover and Goodwin's stewardship in the 2000s. The pace quickens with the ABN Amro deal, whereby Goodwin set out to buy an American retail bank and ended up with a Dutch wholesale one. Then we have the American sub-prime mortgage crisis, the credit crunch and the crisis at RBS, culminating in the biggest failure in UK corporate history and recession in the wider economy. Even though you know the outcome, it's thrilling stuff.

An exception to the chronology is that chapter one deals with the height of the crisis. No doubt Martin's publisher thought it boring to start with a lesson in Scottish history, but to restore the proper order, insert chapter one between 13 and 14.

Martin is at his weakest when he strays from exposition of the facts. In chapter 11, he tries to teach us something of asset and liability management. Having accused Goodwin of having a weak grasp of the subject, Martin shows himself to be less than a master. I would recommend that every aspiring corporate treasury employee read this book as a warning of what can go wrong, but you won't learn much about how treasury actually works.

In his final chapter, Martin gives his own idea for regulatory reform. He thinks that balance sheets have grown too big to be managed by the boards of the banks, so we should have many smaller banks. The trouble is, there are two reasons for bailouts: not only are banks so exposed to each other that a collapse of one can trigger the domino effect, whereby the whole system starts to collapse, but it is politically unacceptable for small depositors and SMEs to lose their deposits. Even small banks may need to be bailed.

Many reforms are needed. Capital ratios are being strengthened by a combination of recapitalisation and balance-sheet reduction. Banks should never again fund long-term assets, such as mortgages, on the overnight money market - banking is all about funding long-term assets with short-term liabilities, such as current account balances and deposits, but the behaviour of such liabilities is well understood and they tend to roll over even in stressed conditions, whereas the short-term money market can dry up overnight as we saw in 2008. The Basel committee will hopefully agree improved standards on the weighting and inclusion of derivatives on the balance-sheet. The new UK regulators need to be bolder in enforcing new capital and liquidity standards and in being willing to refuse to approve insufficiently qualified and experienced bank directors and senior staff. There are things the government could do to help, such as smoothing the boom-bust cycle by counter-cyclicality in economic policy (with the acquiescence of us voters). Clearly, the ratings agencies got things badly wrong leading up to the crisis, so my own view is that we would be in a better position if we moved away from our dependence on these three American firms with their questionable fee structure, and instead developed an international ratings standards body. The latter reforms seem a long way off but the former are well underway and should stave off another disaster for a while. The danger will come in decades' time, when memories have faded and a new generation questions the need for the onerous banking regulation that we are now developing. If you buy Iain Martin's book, leave it in a prominent place where your grandchildren may stumble across it.
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3 of 3 people found the following review helpful
on 26 April 2014
All in all, a pretty good read. However, getting towards the final stages of the book, I was hoping for a detailed analysis of what exactly caused the write downs and losses, but got only a few passing references to how much was lost in a few asset classes or business lines.

Many people have the view that RBS's losses were caused by some vague notion of 'gambling' or 'toxic loans'. This book had the opportunity of laying out exactly what caused the losses, but failed to fully grasp it. Having read the book, I now know that a large percentage of the losses were incurred in property lending, particularly in Ireland (both North and South), but I still am none the wiser of what the total exposure was to US sub prime and related CDOs was, what the eventually realised losses on this asset class were, what percentage of the exposure and losses came from the RBS side and what came from the ABN acquisition etc.

Maybe a future edition could give some more detail on the balance sheet and losses. More interestingly, it could run a what if scenario - estimating what the eventual losses might have been if half of the bank's assets hadn't been sold at fire sale prices.
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2 of 2 people found the following review helpful
on 2 February 2015
This book could not have been written without the active participation of two people - Gordon Brown, and Fred Goodwin. I am seldom lost for words, however on reading parts of this well researched and easily readable book, I was left literally shaking my head and open mouthed.
Whilst Brown is a bit player in this book - the book of course is not about him, but without his policies as Chancellor, Goodwin might not have been in such an easy position to have gone from being an accountant with no banking experience whatsoever, then after a couple of years at the Clydesdale Bank, to within the space of literally a handful of years, transformed the similarly provincial Scottish bank RBS into a monster with a toxic balance sheet of £1.9 TRILLION - £400 BILLION larger than the entire UK economy. There are of course many other culpable figures in this story; members of the parochial and at times nationalistic Scottish establishment who wanted a Scottish bank to one of the world's biggest. Many others were either too afraid of being `shredded' to speak out, or merely happy to keep the bonuses rolling in. Alex Salmond even has a couple of cameo roles - including when he wrote Goodwin a nationalistic `thumbs up' letter on the takeover of ABM Amro, a venture which took place when the warning lights on the control panel were flashing and the klaxons sounding as in any good disaster movie one minute before the music finally stopped. (Ironically, Banco Santander - one of RBS's partners in the venture, unknown to Goodwin, immediately sold off their profitable part of ABM Amro, making them a profit of 2.4bn in three weeks - leaving RBS owning a third of the bank, but 70% of the balance sheet).
Much of the entire financial services industry - and many who sailed in her, were existing in a money- go-round of targets, investments, take overs, and the design and sale of financial products that hardly anybody understood, which were all there for one purpose - to make money, particularly for themselves. Everybody was at it. Bankers, accountants, regulators, auditors & ratings agencies. The more money was made, the bigger the commission and bonuses for all concerned. Individuals were making £10 million a year bonuses.
The entire UK banking boom of the years following the official abolition of boom & bust seemed little more than a stack of pyramid schemes, interlocked through a web of complicated instruments which nobody appeared to understand, built around mathematical formulae and hedging where nobody lost. Markets went up - people made money. Markets went down - they made more. Loans and mortgages were being bundled up into packages and sold off as quickly as possible thus allowing them to loan even more. Banks were even creating products where they were actually betting against the punters who had been daft enough to buy their own products! What could possibly go wrong? Well, the American sub-prime crash saw to that. The rest is, unfortunately history.
Fred Goodwin cannot but come out of this in any other light as an ambitions megalomaniac and bully who appeared to have more interest in things like the colour of bank carpets, cars, or the shape of filing cabinets, than the intricacies of how banking actually worked. He continually displayed extreme arrogance - right up to when in December 2007 he turned up on Alistair Darlings Edinburgh doorstep with a gift wrapped panettone demanding that the Governor of the Bank of England `do something' to get him out of the mess of his own making.
If you want to find out how boom went to bust - there can be few better and more easily readable books. You do not need to be an accountant to understand what went wrong.
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1 of 1 people found the following review helpful
on 14 April 2015
Journalist and broadcaster Iain Martin has written an absorbing account of how Fred the Shred Goodwin destroyed the Royal Bank of Scotland (RBS).

RBS’s rise and fall was part of the cancerous financialisation of capitalism unleashed by Thatcher’s Big Bang. As a result, “In the name of innovation, a sinister alternative universe had been created, in which customer care and ethics had been swapped for pure greed and downright treachery.” Banks’ profits rise when consumer debts rise, as they did from £500 billion in 1996 to £1 trillion in 2004.

RBS had a balance sheet of £870 billion in early 2007. By October it had soared to £1.9 trillion. Goodwin’s response? Buy the sub-prime-riddled Dutch bank ABN Amro. The SNP’s leader Alex Salmond foolishly backed Goodwin’s disastrous bid.

Then, just weeks after saying there was no need to raise any more capital, Goodwin asked for £12 billion. RBS collapsed in October 2008, losing £24 billion. Salmond tried to blame the collapse on English ‘spivs and speculators’, but as Martin remarks, “the real ‘spivs and speculators’ were actually some of those working ‘inside’ the offices of RBS and HBOS.”

The bankers tried to put all the blame for the collapse on the Labour government. The coalition government has followed suit. But RBS’s board of directors, its big shareholders, its accountants, its auditors, the rating agencies, the regulators, the Bank of England, the Treasury and the government all share the blame.

But none of them suffered. When the boom went bust, “It was the British taxpayer that was about to get royally screwed.” To save the bank, the Brown government bought £45.2 billions’ worth of RBS shares and offered billions more in credit facilities.

The collapse sank Brown’s Financial Services Authority and also sank the fashionable dogma of the ‘efficient markets hypothesis’. But unfortunately it didn’t sink the whole rotten ideology of living with capitalism.

After the collapse, RBS’s new bosses carried on paying huge bonuses, claiming that they still needed to ‘attract the best’, when ‘the best’ had caused the disaster. Goodwin was stripped of his knighthood but still draws a pension of £342,500 a year from taxpayer-funded RBS.

There has never been a proper inquiry into RBS’s fall. Nobody went to jail. It was all perfectly legal – which is an indictment of the feeble laws passed by successive governments.

No lessons have been learnt. We are still letting the banks carry on profiting from ever-rising consumer debt. By the end of 2012, the five clearing banks had balance sheets totalling £5.9 trillion (383 per cent of GDP). So a new bankers’ crisis is looming.
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1 of 1 people found the following review helpful
on 24 October 2014
Iain Martin has been let down by his publishers and possibly some of those who he credits on page 323 with help in proof reading and copy editing. It is a sad fact that, in order to save time, money or both, many print and online publishers have curtailed or abandoned either stage (or, worse, both stages) of the editing process. Simply by reading the extracts included on the Amazon site, it is clear that corners must have been cut in these important processes.
For evidence check out page 145 below half way for this classic faux pas - 'There was no way would Goodwin rest on his laurels,..........' Of course this should read 'There was no way Goodwin would rest on his laurels,..........'
Also on page 310 - 'It is easy to elide over the decisions..........' Neither of the 2 usages of 'elide' described on the Oxford Dictionaries website fit with this syntax. The word 'glide' is more appropriate.
Otherwise a very interesting and informative read; I just think that journalists in general and those on the Telegraph's payroll in particular need to pay more attention to spell-checking, proof reading and copy editing so their readers don't end up reading sentences two or 3 times just to ensure their understanding is correct.
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1 of 1 people found the following review helpful
on 16 April 2015
As I was employed by NatWest, latterly (very unfortunately!!) by RBS..met Fred Goodwin on many occasions..without the benefit of hindsight, I saw him as a great problem, particularly with the moronic and weak Chairman we had at the time. The man had the City credibility wrongly given to him, with the 'cleaning' of Clydesdale, when in reality, any half brain could have done as well. Lending to honest to goodness Scots in the main, on a local basis, is relatively straightforward..taking over a multinational Bank, such as NatWest, another matter. The man is aptly described in the book..a hedonistic bully who hid his inadequacies, with his overbearing manner. My great regret, is that the man has not forfeited his entire pension and in prison for the shame he has bought on a great institution, with Bankers who were honest and cared for the client and the good name of the Bank. I spent the bulk of my career in Head Office / Sanctioning and Risk Analysis..so I did see this coming, given the City culture and management structure, which allowed this moron a free reign.
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12 of 14 people found the following review helpful
on 1 October 2013
Making It Happen more or less gets it right - it gives enough detail, but doesn't drown the narrative in banking detail. It is also fairly even handed it it's allocation of culpability. It would have been easy to have made Fred a pantomime villan, but the author doesn't fall into this trap. I think the author deserves credit for this.

That is not to say it is perfect. The perspective is a little too 'Scottish' in places, and would benefit from a greater global perspective. And whilst I understand why the author opted for the structure he did, it meant that the book just faded out with a whimper, rather than the big BANG it deserved. Finally, if the author mentioned that Fred had the RBS limos painted in 'RBS Blue' one more time I think i might have knocked another star off ;)

Finally, I disagree with all the other reviewers saying that this is a story of megalomania, ego or hubris. For me it was a warning about the dangers of group-think and the bad decisions that get made when dissent is all but banned.
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22 of 26 people found the following review helpful
on 17 September 2013
For what to many is a dry (and boring)subject, this book destroys that myth. As an ex NatWest employee I found it totally fascinating and well researched - even explaining CDO's and sub prime mortgages really well. I loved his naming the whole board involved in the ABN-Amro disaster. About time someone did!
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on 14 June 2014
Iain Martin has taken on the difficult task of trying to describe what went so woefully wrong at RBS and to give some historic perspective to what was a provincial bank that 'exploded' on to the global scene in just over a decade. I can't imagine that those directly involved were queuing up to give Mr Martin first hand accounts of what went on and, under the circumstances, he has created a readable and informative account of a contender for most disastrous bank award, an award that is sadly competed for by another Scottish based bank (whose demise is described well in Ray Perman's book). The first chapter grips, as it was well intended to, but sadly not as a Hollywood script or work of fiction but as a narrative on just how serious the consequences of RBS' situation was for us all. The fact that the economic system could be so interdependent on the actions of a relatively limited number of organisations and in turn be affected by a limited number of misguided senior representatives of these organisations, as jollied on by shareholders and governments alike, is terrifying. Iain Martin conveys this well without resorting to overt personalisation,when it must have been tempting to do so.
I suspect that Mr Martin may have the opportunity to revisit his book in years to come as more and more information becomes public, and the threats of personal attack on those who shine lights on public affairs lessen, but in the meantime, he and a few other commentators have provided a highly valuable insight into something that should never have been allowed to happen but, sadly, through vested interests or ignorance of how global finance might work in the 21st Century, might 'make it happen again'.
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