Inside the Bank that ran out of money

For this weeks blog I had to watch a documentary about the 2008 crisis when the royal bank of Scotland nearly came to a collapse. RBS managed to loose a record corporate loss of 24.1 billion pounds, this damaged the reputation of the well respected bank and the trustworthy financial industry Scotland had as a whole.

It started when the very stubborn Fred Goodwin didn't comply with  'risk management' and bought into a lot of companies that failed loosing billions of pounds. I believe he was too over confident and the power of CEO went to his head, just because he was very successful in the past for many years it shows the swings and round about the financial market can have.
His biggest mistake was not investigating into ABM AMRO's (This was, at the time, the largest rights issue in British corporate history) financial state, this amazed me as Fred Goodwin was recognised for being thorough, good credit record and reducing as much risk as he could with any investment, did he just not care as much anymore and rely on his experience in the market? RBS invested 10 billion pounds into a company they knew little about, for me this is madness with extremely high risk which isn't what shareholders like to hear, some argue 'prefers size over shareholder value'. Once they secured this deal they paid in cash leaving them very vulnerable to any problems that may occur, which of course they did.

Its hard to say how this may affect me? I feel as if I'm a sympathetic person and I really feel for those hard working people who put away their money into these banks as small investment or just an icer to keep them secure. When someone like Fred Goodwin and his egotistic investments puts peoples money on the line with very high risk which of course backfired and made a loss of £24.1 billion it makes me think how he can sleep at night?

This documentary shows two sides of the spectrum, RBS splashing the cash and owning the title as one of the worlds biggest banks. It shows the success RBS made over many years and how much there profits grew. But it also shows how one big mistake can cause the crash of profits and rise in debt. When dealing with such large investments of billions of pounds, you must be 100% sure that there's least risk as possible and it should return profits, RBS did not do this and unfortanely lost billions of ounds. Hopefully they learn from mistakes and nothing like this happens again in the future.