Th is paper develops a political economic explanation of the 2007-9 US subprime crisis which focuses on one of its central causes: the transformation of racial exclusion in US mortgagemarkets. Until the early 1990s, racial minorities were systematically excluded from mortgagefi nance due to bank-redlining and discrimination. But, then, racial exclusion in credit-markets was transformed: racial minorities were increasingly given access to housing-credit under terms far more adverse than were off

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... ered to non-minority borrowers. Th is paper shows that the emergence of the subprime loan is linked, in turn, to the strategic transformation of banking in the 1980s, and to the unique global circumstances of the US macro-economy. Th us, subprime lending emerged from a combination of the long US history of racial exclusion in credit-markets, the crisis of US banking, and the position of the US within the global economy. From the viewpoint of the capitalist accumulation-process, these loans increased the depth of the fi nancial expropriation of the working class by fi nancial capital. Th e crisis in subprime lending then emerged when subprime loans with exploitative terms became more widespread and were made increasingly on an under-collateralised basis -that is, when housing-loans became not just extortionary but speculative.