Goodwin's legacy lives on at RBS as he enjoys retirement

In the days when Fred Goodwin was busily running Royal Bank of Scotland (RBS) into the ground, taking a pop at the world's worst banker came at a price. It was almost guaranteed to prompt a call from one of his legions of PR people. Having worked themselves up into a good lather, they would invariably start the conversation by pointing to his hostile takeover of the National Westminster Bank in early 2000 as an example of why their boss was cleverer than God and should be immune from criticism.

For years this was held up as a wonder-deal, an example of what mergers and acquisitions could do. The former Sir Fred was held to have turned around the sinking NatWest while transforming a rather dull and conservative financial institution largely restricted to Scotland into a super-duper megabank in the process.

Even after RBS's fall you could still find people to laud the NatWest deal. The blame for its troubles was placed upon the hubris-driven acquisition of the Dutch bank ABN Amro.

Yesterday's publication of letters between Stephen Hester (Mr Goodwin's successor), pictured, and the Treasury Select Committee tell a different story. The bank's recent IT snafu was felt most keenly in Northern Ireland, where some customers found themselves shut out of their accounts for weeks.

Mr Hester, pictured, explained why: "Ulster Bank has been more heavily affected... as it is in part dependent on NatWest systems."

In other words, 12 years after the deal, RBS is still a mess and using a hotchpotch of different systems.

The first thing a company does after a merger is slash and burn. Executives know that rapidly cutting costs by eliminating duplicate roles and branches is essential to keep the City happy and their bonuses fat. Then it's on to the next deal. This is what happened at RBS. The tens of thousands of customers in a small part of the operation across the Irish sea? They were forgotten and left to rely on rickety old systems that RBS hoped would muddle through.

Now the Financial Services Authority is investigating and there will likely be some sort of fine, which won't matter much. The bank is owned by the state and Mr Hester has already passed on his bonus.

Meanwhile, the man responsible for the mess is enjoying the fruits of an enormous pension pot, immune from accountability. And still the City's advocates can't seem to get their heads around why this makes people cross.