US justice department metes out largest penalty yet for financial crisis-era misconduct, as customers rate bank worst bankers.
Highlighting reports that Royal Bank of Scotland bankers 'joked about ruining US housing market,' a US justice department reportt revealed the extent of bankers and traders' disregard over their alleged misconduct that led to the 2008 crash. The report was published alongside the announcement that RBS had agreed to pay $4.9bn (£3.6bn) to settle the DoJ's probe, and a UK survey revealing customer disdain for the bank.
According to the US department of justice report RBS traders compared their behaviour to gangsters in ‘Goodfellas’ and joked about ruining the US housing market in the run up to the financial crisis. The report comes at the same time as customers ranked RBS as the worse banks, according to a survey undertaken by the first rankings published by the Competition and Markets Authority (CMA). RBS is joint bottom of the personal banking league table with Clydesdale, and bottom for business banking. The damning US report into the mis-selling of mortgage-backed securities before the 2008 banking collapse reveals the scale of disregard bankers and traders apparent had towards the global monetary meltdown. acting associate attorney general Jesse Panuccio said, ‘many Americans suffered lasting economic harm as a result of the 2008 financial crisis,’ adding ‘this settlement holds RBS accountable for serious misconduct that contributed to that financial crisis, and it sends an important message that the department of justice will pursue financial institutions that illicitly harm the American economy and our consumers.’
‘Good run while it lasted’
According to the report, one top banker described the loans as ‘total f***ing garbage" with "fraud [that] was so rampant... [and] all random’ so ‘the loans are all disguised to, you know, look okay kind of... in a data file.’ The underwriting of loans was summarised in October 2007 to a top trader, ‘you can't get to these default levels without having every possible, you know, style of scumbag... it's like quasi organised crime.’ RBS's due diligence process was, as a senior bank analyst described, ‘just a bunch of bullsh**.’ RBS chief executive Ross McEwan said there was ‘no place for the sort of unacceptable behaviour alleged by the DoJ at the bank we are building today,’ though despite DoJ accusing RBS of misleading and providing inaccurate loan data to investors, RBS said it ‘disputes and does not admit’ the allegations. However, as trader remarked in the report, ‘it's unfortunate for us; it was a good run while it lasted.’