The boss of RBS has told Sky News that it could take another decade for British customers to trust banks again.
Ross McEwan, the bank’s chief executive, also said that the effects of the financial crisis had put Britain on the road to Brexit, because austerity had caused people to want to “change the way they think about things”.
Mr McEwan has been running RBS since 2013, and has been responsible for the bank’s transformation – becoming smaller, and far more focused on its domestic market.
But his job remains intrinsically linked to the financial crisis. RBS’s biggest shareholder remains the British government, a hangover from the emergency bailout that saved RBS during the financial crisis. In many people’s minds, RBS remains the great example of how a corporate body wreaked havoc.
Mr McEwan’s analysis of that time, when Fred Goodwin ran RBS, is succinct: “The problem was around trying to be the biggest instead of saying let’s just be the best bank we possibly can.”
When the music stopped, Mr Goodwin was fired and stripped of his knighthood, and RBS nearly collapsed.
Mr McEwan told me there had been “a complete clean-out of the executive rankings” in British banking since the financial crisis, but admitted that the damage done to the public trust remained a painful legacy.
“You’ve had 10 years of ramifications of the largest global financial crisis since the 1930s, and the public has a long memory.
“People still have a distrust of many, many in the banking industry and I think it’s going to take another five to 10 years for banks to actually rebuild the trust that we lost 10 years ago.
“The public were, quite rightly, very critical of the banking industry, because of what we did. I think the public will remain very sceptical about the interests of banks and bankers. It’ll take some time to resolve that.”
It is the knock-on effects that have hurt so many people, not least years of austerity.
So I asked him whether it would be fair to make a link between the financial crisis, and then to austerity and the discontent that shaped the outcome of the Brexit referendum.
“I think it is fair,” he replies. “The economy is growing at a low rate, savers are getting very little returns and I think that has led people to say ‘my lot isn’t as good as it used to be’.
“Austerity has been a thing of rebuilding – both personal rebuilding of your own financial position, and also the government and corporations. I think that has led to people saying that this has created problems. And they don’t want those problems any more. So they say ‘let’s change the way we think about things’.”
So did the financial crisis actually lead to Brexit?
“I think it would have had some impact on it, yes.”
Mr McEwan said there was “bound” to be another financial crisis “at some point in time”. But when I ask him for any guess at when – he shrugs his shoulders. Nobody saw the fall in the oil price a couple of years ago, he says, adding that “it would never have appeared on the risk register at any bank”. But then it came, and shook up the economy. Nor, he says, did anyone predict “something happening in Italy a few months ago”.
“I don’t think you’ll really understand where the next one come from. It may be a combination of several things.
“In fact I suspect it’ll be something that we haven’t seen, so you just have to be ready for any eventuality. Will anybody see it coming? I suspect it’ll be difficult, and I also suspect that the banks will be in a much, much better position to deal with it.
“I think that was the problem that was around trying to be the biggest instead of saying let’s just be the best bank we possibly can be.”
Mr McEwan has reshaped RBS into a profoundly different bank from the one that crashed so spectacularly in 2008. These days, it is more conservative and wary. But as memories fade and as investors seek greater returns, will he be under pressure to take more risks, as his predecessors did? Other banks, particularly in the US, are pushing the envelope.
Mr McEwan almost trembles at the prospect. “Yes, other leaders have forgotten about the past but we’re too quick, I think, to forget the lessons that we learned.
“For sure, in my day we are not going to be stepping outside their risk appetite. And if that means giving up some business and some growth, I’m very happy to do so.”