Goodwin not the only bank fat cat to escape with Government swag

Sir Fred Goodwin, former chief executive of Royal Bank of Scotland, is not the only one to have escaped from the carnage in the city with a huge pay-out for his incompetence.

The full extent of the damage inflicted on banking rivals HBOS by its greed-driven executives was also revealed this morning when Lloyds posted a £10.8bn loss for the bank which was bailed out last October by the taxpayer.

John Prescott launched a bone-crunching left hook at Sir Fred Goodwin, the former RBS chief executive, on the Today programme by calling on the Government not to pay out his 'discretionary' £690,000 per annum pension.

"Stop paying him and let him sue in court," said Prescott. The former deputy Prime Minister political blogger reckons a survey of 6,000 people shows his hard line would be supported by public opinion.

The Mole fears Prescott is going to be tearing out his (dyed?) hair when he learns that Sir Fred (pension fund £16m) is only the latest in a line of bankers bailed out by the taxpayer who can retire on the proceeds of their greed.

Gordon Brown promised at his monthly press conference in February that bonuses for HBOS executives would be 'limited'. But the main beneficiaries have already escaped with their pension pots intact.

Former chief executive of HBOS Sir James Crosby walked away with a pension fund worth £10.4m. It is unlikely that Crosby, 52, will be faced with a Prescott-style claw-back on behalf of the angry taxpayer however. Crosby, 52, now sits on the Financial Services Authority, the body responsible for policing the City.

His lieutenant Peter Cummings, 52, who oversaw £109bn of loans that led to HBOS crashing into the buffers, can retire with a £5.2m pot. Crosby's successor at the bank Andy Hornby, 41, left with a pension fund of £2m.

Lord Myners, the former banker brought into the Government by Brown to add some City expertise to the front bench, is getting the blame for not realising that Sir Fred's pension was discretionary when he looked over the details of his package during a crisis meeting with the RBS before the bail-out last October. There is talk that Myners, as a banker, failed to spot the political booby-traps in Sir Fred's pension deal, being used himself to the bloated bonuses enjoyed in the City.

The Tories are determined that Myners - a minor player in the tragicomedy of errors - should not become the scapegoat for wider government incompetence. Brown and his poodle at the Treasury, Alistair Darling are being accused by leading Tories of failing to carry out 'due diligence' when they bailed out the banks.

THE MOLE: BANKING INQUEST

FIRST POSTED FEBRUARY 27, 2009