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LAST month a Telegraph headline said: “Government closer to selling RBS stake after bank agrees ‘milestone’ £3.6bn US fine.”
In May, the Royal Bank of Scotland agreed with the US Department of Justice to settle lawsuits accusing the bankers of selling products linked to risky mortgages in the US between 2005 and 2007.
These were the dodgy financial products at the centre of the banking crisis, so it seems RBS is admitting responsibility for an economic fraud that has caused deep misery for millions.
Now the fine is paid, the government thinks it can reprivatise the bank.
RBS chief executive Ross McEwen said: “It does help the government sell a cleaner bank.”
RBS was nationalised in 2008 — we bailed out the bank because it was crashing, following its involvement in all the dodgy banking that caused the economic crisis.
Since it became publicly owned, the bank has paid multiple fines for its misbehaviour. In February 2013 RBS paid £390m for “widespread misconduct” in rigging the “Libor” rate.
In May 2014 it was fined $664m (£502m) for rigging Forex exchange rates.
In November 2014 RBS was fined £217m in Britain and $290m (£218m) in the US for rigging Forex.
In December 2016 RBS paid £800m for settlements with shareholder groups over misleading investors.
However, now the publicly owned bank has been made “cleaner” by paying off all these fines, it will be sold off again — probably at a loss of around £26bn after the £45bn bailout of RBS during the financial crisis.
So the publicly owned bank pays all the fines. We pay for their crimes. Then they are privatised at a loss to the taxpayer. The fines have been nationalised, the profits privatised.
Solomon Hughes writes every Friday for the Morning Star. Follow him on Twitter @SolHughesWriter.
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