Fred the shred and the ‘great wealth transfer'
Yesterday, UK Financial Investments (UKFI) Chief Executive John Kingman told MPs that Fred ‘the Shred' Goodwin could have been awarded just half of the £16 million pension pot he was given...
Mr Goodwin was one of four men who led two of Britain's biggest banks to the brink of collapse - they recently apologised to the nation before defending their actions during a lengthy grilling by a panel of MPs investigating the origins of the banking crisis.
It has now been revealed that the controversial pension award was ‘partly discretionary,' although up until last month, UKFI and the Government were under the impression that it was an unavoidable legal commitment.
Giving evidence to the Treasury Select Committee, Mr Kingman described the pension award as ‘extraordinary"' and said UKFI was exploring all legal avenues to redress the situation.
Eric Jafari, CEO of BridgePoint Ventures, LLC, Vertical Realty Advisors, LLC and Managing Director of EquityBridge Capital, Ltd is investigating the origins of the banking crisis in a blog.
"All things either come to an end or Change," he said.
"The events of 2007 and 2008 are unlike anything experienced by our generation. As a result of the Credit Crisis, the global capital markets experienced a £21.3 trillion loss in 2008, with more to come.
"From the dramatic rise in mortgage delinquencies, to the declining capital in banks to the nationalization of financial institutions and the shocking sums of liquidity required to rescue the financial economy, the consequences have made its way to the general public.
"Unemployment, tax rises, pay cuts and universal uncertainty about the future collectively haunt the general economy creating an equitable opportunity that most recognize will not reoccur during our lifetimes.
"Analysts and economists globally project the largest transfer of wealth to takes its course in the next five to ten years, the majority of which resulting from the market stabilization of acquired distressed assets.
"Much like the Wall Street Stock Market Crash in 1929, the Japanese asset bubble in 1980, the Asian Financial Crisis in 1970, the Dot Com bubble in 2000 and the US Savings and Loan Crisis of 1989, this £21.3 trillion transfer of wealth will accrue to the pockets of those that are disciplined enough to embrace the Warren Buffett principle that the profit is generated by the purchase price, not the sell.
"The number of mortgage delinquencies, the liquidity crunch, bank regulatory requirements to shore up capital and the financial sector's need for operating capital has forced banks and financial institutions to dispose of assets at discounts historically unavailable," he added.
Source: www.telegraph.co.uk and www.ipinglobal.com