The Bank That Almost Broke Britain | BBC Documentary 2018 HD
Short Summary:
This BBC documentary recounts the near-collapse of the Royal Bank of Scotland (RBS) in 2008, a crisis that nearly brought down the British economy. The documentary details the aggressive expansion and risky acquisitions under CEO Fred Goodwin, leading to the bank's reliance on short-term borrowing and massive exposure to toxic subprime mortgages. The resulting crisis necessitated a government bailout costing British taxpayers over a trillion pounds, highlighting the systemic failures within the banking system and the consequences of unchecked ambition and deregulation. The documentary explores the processes leading up to the crisis, the frantic efforts to secure a bailout, and the lasting impact on public trust and the British economy. Specific examples include the ABN AMRO acquisition and the use of government bonds to provide emergency liquidity.
Detailed Summary:
The documentary is structured chronologically, tracing RBS's rise and fall.
Section 1: The Fall of RBS and the Immediate Crisis: The documentary opens with the dramatic events of October 7, 2008, when RBS teetered on the brink of collapse. The sheer scale of the potential catastrophe—no cash in ATMs, hospitals unable to function—is emphasized. The immediate response by the Chancellor of the Exchequer, Alistair Darling, and the Bank of England Governor, Mervyn King, is highlighted, illustrating the frantic efforts to secure emergency liquidity for the bank. The quote, "we only had one shot here; if it didn't work, there was nothing else we could have done," underscores the gravity of the situation.
Section 2: The Rise of RBS and Fred Goodwin: This section details the transformation of RBS under George Mathewson and subsequently, Fred Goodwin. Mathewson's "Project Columbus" modernized the bank, but the shift towards aggressive profit-seeking is noted. Goodwin's ruthless cost-cutting ("Fred the Shred") and ambitious acquisition strategy, culminating in the disastrous ABN AMRO takeover, are presented as key factors contributing to the crisis. The documentary contrasts Goodwin's early success and accolades (Forbes' International Businessman of the Year) with his later hubris and questionable decisions.
Section 3: The Bailout and its Aftermath: This section focuses on the government's desperate efforts to prevent a complete economic meltdown. The details of the bailout plan—massive injections of cash, government guarantees, and the controversial nationalization of RBS—are explained. The intense pressure on Alistair Darling and the Treasury team to secure a deal before markets opened is depicted. The quote, "it was never really about saving the banks, it was about saving the economy from the banks," summarizes the government's perspective. The fallout includes Goodwin's resignation, the stripping of his knighthood, and the lasting anger and distrust among the British public.
Section 4: Systemic Failures and Lasting Impact: The documentary concludes by emphasizing the systemic failures that contributed to the crisis. It points to the lack of proper oversight by regulators, the government's focus on tax revenue from booming banks, and the unchecked risk-taking within the financial system. The long-term consequences—the cost to taxpayers, the erosion of public trust in business leaders and politicians, and the ongoing struggles of RBS—are highlighted. The final quote, "the pain was nationalized to the country," encapsulates the enduring resentment over the bailout.