Emails released by the US Department of Justice (DOJ) show RBS bankers joking about destroying the housing market before the 2008 crash.

RBS’s chief credit officer described the products he was selling to investors as "total f****** garbage" loans with "fraud [that] was so rampant … [and] all random."

The DOJ said the bank made "false and misleading representations" to sell more mortgage-backed securities, adding that senior executives "showed little regard for their misconduct and, internally, made light of it."

RBS paid $4.9 billion earlier this year to settle the investigation.



LONDON — Royal Bank of Scotland (RBS) bankers joked about destroying the US housing market and senior staff described the loans they were trading as "total f***** garbage," according to transcripts released by the US Department of Justice.

Email and call transcripts in a DOJ report released on August 10 as part of a $4.9 billion settlement with RBS show the bank’s chief credit officer in the US said the loans they were selling were "all disguised to, you know, look okay kind of … in a data file."

He went on to say that the products being sold were "total f****** garbage" loans with "fraud [that] was so rampant … [and] all random."

The US Department of Justice criticized the bank for its conduct and trade in residential mortgage-backed securities (RMBS), which played a central role in the crisis.

The DOJ said the bank made "false and misleading representations" to sell more RMBS, adding that senior executives "showed little regard for their misconduct and, internally, made light of it."

When the contagion in the housing market became clear, the head trader at RBS got a call from a friend who said: "[I’m] sure your parents never imagine[d] 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.

The bank disguised the risks to investors while making hundreds of millions from a housing market that a senior RBS banker described as broken, incentivising bad loans that meant lenders were "raking in the money."

Employees who might raise the alarm about the risky practices "don’t give a s*** because they’re not getting paid," he said.

The transcripts reveal that as the banking system started showing signs of break-down by early October 2007. The chief credit officer at RBS wrote to colleagues saying that loans were being pushed by "every possible … style of scumbag," and it was "like quasi-organised crime."

"Nobody seems to care," he said.

A senior bank analyst at RBS also described the bank's due diligence process on loans as "just a bunch of bullsh**," according to the DOJ.

In May 2018 RBS chief Ross McEwan said the deal with the DOJ to end the investigation was a milestone for the bank. "Our current shareholders will be very pleased this deal is done. It does help the government sell a cleaner bank," he said.