Employees at the Royal Bank of Scotland (RBS) joked about crippling the U.S. housing market before the 2008 financial crisis, according to transcripts released by the Department of Justice (DOJ) last week.
According to DOJ transcripts, senior staff described loans they were trading as “total f–king garbage.” DOJ also found that the Sottish bank’s chief credit officer in the U.S. said the loans were “all disguised to, you know, look okay kind of … in a data file.”
The release of the email and call transcripts were part of a DOJ report, which resulted from a $4.9 billion settlement with RBS, Business Insider reported.
In its report, DOJ accused RBS of making “false and misleading representations” to sell more residential mortgage-backed securities to investors. The Justice Department added that executives “showed little regard for their misconduct and, internally, made light of it.”
After the shoddy loans began to erode the U.S. housing market noticeably, RBS’s head trader reportedly received a call from a friend who said, “[I’m] sure your parents never imagined they’d raise a son who [would] destroy the housing market in the richest nation on the planet.”
“I take exception to the word ‘destroy.’ I am more comfortable with ‘severely damage,'” he replied, according to DOJ.
According to transcripts, the banking system began to reveal flaws in October 2007. The chief credit officer wrote to co-workers that loans were being pushed by “every possible … style of scumbag,” saying it was “like quasi-organized crime.”
The emails’ release comes about a decade after actions by companies like RBS helped contribute to the U.S.’s financial meltdown and subsequent Great Recession.
Upon reaching a $4.9 billion settlement with DOJ in May, RBS chief executive Ross McEwan said the settlement was a milestone that would help “the government sell a cleaner bank,” The Guardian reported.