West Yorkshire MP Yvette Cooper served as the Chancellor Alistair Darling’s number two when Lehman Brothers collapsed, and as Northern Rock and RBS were nationalised as the Government to protect people’s savings.
She recalled Ministers and officials working through nights and weekends, “pulling out all the stops”, while banks were “effectively stealing people’s money because of their failure and incompetence”.
She told The Yorkshire Post: “The shocking thing about the irresponsibility of the banks in that period was you would get the chief execs of banks basically shrugging their shoulders - people who had been paying themselves these multi-million pound bonuses and salaries for years - when they reached the point of crisis just shrugging their shoulders and ringing up the Treasury and saying ‘well, it’s your problem now’.
“They were effectively ringing up the Treasury and saying ‘we’re just going to have to go bust, we’ve got no other way to finance this’.
“That’s when the Government had to step in to stop these banks crashing.”
Ms Cooper recalled how on one occasion she was half way to her constituency on a Friday morning when she was called by Treasury officials who told her “we may have to have to nationalise RBS this afternoon, you need to come back, the Chancellor is on a plane and we can’t reach him”.
The Normanton, Pontefract and Castleford MP said: “I just had to get off the train at Grantham station and go back down and spend a weekend at the Treasury while officials were putting together things to ensure people didn’t lose their savings.”
Ms Cooper admitted Labour had allowed the banks to be too loosely regulated in the years leading up the crisis, but argued the situation was the same in the United States and Europe, adding: "I think part of the problem was that nobody fully understood how complex the derivatives and so on had become.”
But she praised the response of then-Prime Minister Gordon Brown and the Chancellor, saying they “showed real leadership in the face of an unprecedented international crisis".
"What they basically said is we are not going to let people suffer because of the bankers’ failure and incompetence, we are going to step in and make sure people’s savings are protected," she added.