THIS week, the US Department of Justice (DOJ) released a load of emails and transcripts of phone conversations between senior executives of RBS, the UK bank that collapsed in 2008 after the prime mortgage crisis in the American housing market brought every bank in the world to its knees. RBS had to be ‘rescued’ in that year by the UK taxpayer with a £45 billion bail-out, the biggest such bail-out in history after the then Labour chancellor Alistair Darling was told that the bank had only enough money to keep operating for two or three hours!
Now the DOJ, which has been investigating for years RBS’s role in the selling of mortgages to US borrowers who had no chance of repaying them, has released emails written prior to the crash in which RBS bankers and traders openly joke about RBS ‘destroying’ the US housing market. According to one email, RBS’s chief credit officer, the man responsible for ensuring that due diligence was taken by the bank before making loans, described the products he was selling to investors as ‘total f*****g garbage’.
The transcript released shows him writing that the US loans they were selling were ‘all disguised to, you know, look okay kind of … in a data file’ before going on to say that in reality they were ‘total f*****g garbage’ loans with ‘fraud that was so rampant … and all random’.
When in 2008 it became clear that all these ‘garbage’ loans had destroyed the US housing market and threatened the entire banking system, senior executives of the bank treated the whole thing as a joke. One transcript reveals a conversation between the head trader at RBS and a friend, who said: ‘I’m sure your parents never imagined they’d raise a son who would one day destroy the housing market in the richest nation in the world.’ The trader responded by joking: ‘I take exception to the word “destroy”. I am more comfortable with “severely damage”.’
What the DOJ has revealed is that these high-flying bankers with their multi-million-pound wages and bonuses knew exactly what they were doing. When signs of the crash began to emerge in 2007, the chief credit officer at RBS wrote to colleagues saying that loans were being pushed by ‘every possible … style of scumbag’ and that it was ‘like quasi-organised crime’, before adding: ‘Nobody seems to care.’
When the whole swindle started to unravel and couldn’t be covered up anymore, RBS attempted to cover its tracks by tightening up its due diligence procedures for making loans – described by one analyst at the bank as ‘just a bunch of bullshit’ – leading one senior executive to wail, ‘Oh, God. Does anyone want to make money around here anymore?’
Of course the bankers at RBS and all the rest may have felt dismayed that their money-making scam had hit the buffers but they were secure in the knowledge that it would be the ‘little people’, the workers and middle class, who would pay the price of their criminal activities. Not a single banker has been jailed or individually penalised for what they themselves boasted was a fraud and in which they admitted amongst themselves RBS operated like a ‘quasi-organised crime’ organisation.
In fact, there is no ‘quasi’ about it. The entire capitalist banking system is one big criminal organisation that puts the Mafia in the shade.
These bankers lord it over the working class and when their scams fall apart, they demand workers pay for them to be bailed-out through austerity cuts to pay and benefits while the NHS is being systematically starved of money and set up for privatisation by these same billionaires who caused the crisis. One thing is clear: the banks cannot be reformed or tamed; they are still carrying on as RBS did in 2008.
The only way to put an end to this criminal conspiracy is for the working class to carry out a socialist revolution in Britain and in all the major capitalist countries and replace the criminal anarchy of capitalism by expropriating the bankers and bosses under a planned socialist economy that works to satisfy people’s needs not for the profit of the capitalist class.