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British PM attacks 'indefensible' banking practices

  • Story Highlights
  • Brown hits out at unacceptable banking practices
  • Brown: "No opt out, no waiver, no free pass for any banks"
  • Fred Goodwin retired from RBS after company's UK govt. bailout last year
  • He receives an annual pension of £650,000 ($933,000)
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LONDON, England (CNN) -- Britain's prime minister Gordon Brown repeated his call Saturday for former bank chiefs to give up massive pension packages and demanded a clean-up of the banking system to eradicate "Indefensible" practices.

British premier Gordon Brown

British premier Gordon Brown has vowed to rebuild the damaged banking system.

In a speech to the ruling Labour Party's National Policy Forum in Bristol, south-west England, Britain's Press Association quoted him as saying: "Some of the practices now being discovered in our banks are not only unacceptable, they are indefensible and they have got to be cleaned up now.

"Many of the bank executives who got banks into this mess have now left their jobs; the boards of failed banks have gone; the four most senior executives of HBOS and RBS have all now left their jobs; seven non-executive directors of RBS lost their jobs; the HBOS board has ceased to exist.

"And we are exploring all the legal action necessary to recover pension payments from people who received too much."

Brown's comments follow the news last week that embattled former RBS boss Fred Goodwin had rejected calls for him to give up some of his estimated £650,000-a-year ($933,000) pension package.

Goodwin, who stepped down as CEO of the ailing bank late last year, responded angrily, saying he had already given up a number of contractual rights which had cost him a lot of money.

This stance has angered many within the British media, who are demanding action.

Under the headline "Shred Fred (Goodwin's nickname was Fred the Shred)," the Sun newspaper's editorial on Friday opened with: "Grasping banker Sir Fred Goodwin gives two fingers to us all."

The Daily Mail's Alex Brummer was equally outraged, though laid some of the blame at the government's feet.

"The stubborn refusal of former RBS boss Sir Fred Goodwin to forgo his pension, despite being responsible for the worst corporate financial failure in Britain's history, is the ultimate example of the banking world's crass insensitivity to the public mood," Brummer wrote.

During his speech Saturday, Brown also warned financiers that there would be "no opt out, no waiver, no free pass for any banks," The Guardian newspaper quoted him as saying.


He said: "We face a wholly unprecedented challenge that I believe only we [Labour] can address and overcome. We have seen banks go bankrupt, bank lending frozen and now a banking failure that has contaminated the whole economy and put people's savings, mortgages and jobs at risk."

He added: "Our task must be nothing less than to rebuild a financial system where it has failed and then to create an economy where banks are no longer serving themselves but serving the public of this country."

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