What Is a Bankster?

Gregory Hanson

The term “bankster,” which derives from the words “gangster” and “banker,” is a derogatory term applied to a banker or financial professional. The term has strongly negative connotations and originated on the right wing of American politics. Others, however, have adopted the term, and many different groups are likely to use it, each imbuing it with a somewhat different meaning.

"Bankster" is sometimes used to deride Wall Street hedge fund managers.
"Bankster" is sometimes used to deride Wall Street hedge fund managers.

The term was used in the 1930s and 1940s with two different meanings. The popular press often stuck the label of “bankster” on bankers felt to be corrupt or greedy. The low esteem in which financial professionals were held after the crash and onset of the Great Depression gave the press plenty of reasons to attack them. The prevalence of organized crime during Prohibition probably also played a role.

Supporters of the Federal Reserve System may be called "banksters" by some.
Supporters of the Federal Reserve System may be called "banksters" by some.

Members of the Austrian School of economics were fond of the term as well. Murray N. Rothbard used the word “bankster” as a slur against the bankers and backers of the U.S. federal reserve system. Rothbard and many other members of the Austrian School held that the federal reserve was something between a scam and a conspiracy and that those who backed it were both gangsters and bankers.

Some members of the right with strongly anti-Semitic views have called bankers banksters. In these cases the term has a racial connotation which it lacks in general usage on either the right or the left. This use of the term persists, although it is limited to the political fringes.

This versatile portmanteau word has continued to be popular. It is still often used by members of the political right in America, especially modern libertarians. Many Libertarians have inherited Rothbard’s distrust of the Federal Reserve system and still call its supporters banksters.

Libertarians were also extremely displeased with the course of the financial rescue plans put in place to deal with the recession of 2008. They largely felt that these plans, too, were unethical. This led to the use of the epithet “bankster” when describing beneficiaries and architects of the bailout plans.

In 2011, the left, too, continues to use this word as a label for greedy bankers or financial insiders who seem to profit by questionable means. They use the term more generally than the libertarian right tends to. Members of the American left are as apt to apply it to Wall Street hedge fund managers, unscrupulous mortgage brokers or corporate CEOs as to actual bankers. This type of bankster might also be a political insider or appointee with questionable ties to the world of finance.

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