Still, the decision to strip him of it for events that happened after it was granted does raise questions over the whole system of honours; it looks like nothing more than official buck-passing.

As Sir Digby Jones, the former CBI director, put it: "There is the faint whiff of the lynch-mob on the village green about this, but that isn't to say that the end result isn't what is right."

Goodwin's knighthood for services to banking was awarded in 2004. That was three years before his decision to buy out the failing Dutch bank, ABN-AMRO, that led to the collapse of RBS.

Propping up RBS cost the taxpayer £45.5bn and helped trigger the recession. Ulster Bank employees - part of the RBS group - are still paying the price of his profligacy with their jobs and will feel little sympathy for him.

Yet, in 2004, when he was knighted, Sir Fred had already embarked on the high-rolling programme of acquisitions which would prove his downfall; splashing out £10.5bn for Charter One Financial of Ohio was just one of the deals which amazed the financial world that year.

The knighthood for "services to banking" rewarded such behaviour and encouraged him to continue with it.

It marked the moment when the Establishment hugged him to its bosom and made him one of the great and the good.

It was a terrible mistake, but not the greatest mistake of the Labour government.

With the full support of the Tories, they had encouraged 'light-touch regulation' in the City.

They made a Faustian pact in which they let the financial markets rip in return for increased taxation and rewarded reckless risk taking by men like Goodwin.

When they won, they kept the spoils; when they lost, the taxpayer footed the bill.

It was socialism for the rich and capitalism for the rest of us.

The forfeiture committee announced that Goodwin had "brought the honours system into disrepute". But isn't it a deserved disrepute?

It slapped his back and fawned on him when he was on a roll and now that things have gone wrong, hands are being washed.

It all smacks of snobbery and hypocrisy. It devalues the many deserved honours given to people, who have worked selflessly in the background and it may explain why so many truly great people have refused to be part of the honours club.

However, I notice on the list of refuseniks published last week, that at least one local man who boasted of turning down an OBE, does not actually feature.

Still, Fred can console himself with his annual £342,500 pension and a £2.7m tax-free lump sum, which the Government let him keep after he brought the country to its knees.

And he can think himself lucky he didn't suffer the fate of one man given the Order of St Michael and St George - Sir Roger Casement was made plain Mr Casement the day before they hanged him for treason.