Advanced Search

The story appears on

Page A6

December 24, 2016

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Finance

Deutsche Bank, Credit Suisse in US settlement

Source: AFP | December 24, 2016, Saturday | Print Edition

DEUTSCHE Bank and Credit Suisse said yesterday that they have agreed with US authorities to pay billions of dollars to settle probes into the sales of toxic mortgage bonds that contributed to the 2008 financial crisis.

The German lender will pay a total of US$7.2 billion — a US$3.1-billion fine and US$4.1 billion in relief to consumers — as part of the long-sought agreement in principle with US authorities, it said.

Shares in the German banking giant rose on the Frankfurt stock exchange on the heels of the announcement, which analysts said was a good outcome for now.

“With this settlement, CEO John Cryan has given himself and Deutsche Bank a Christmas present,” said analyst Ingo Frommen at LBBW bank.

In September, the US Department of Justice had sought an unaffordable US$14 billion fine from Deutsche, sparking fears the bank could collapse and destabilize the global financial system.

Hours after yesterday’s announcement, Credit Suisse said it too has struck an agreement with US authorities to pay almost US$5.3 billion to settle disputes over the sale of subprime mortgage bonds.

A day earlier, the DOJ said it was suing British financial giant Barclays, accusing the bank of massive fraud in the sale of mortgage-backed securities in the US.

The rash of announcements comes as the outgoing administration of US President Barack Obama is racing to complete investigations into the Wall Street firms that created and sold the risky mortgage bonds that led to the worst crisis since the Great Depression.

Authorities have already taken more than US$46 billion in fines from six US financial institutions over their dealings in mortgage-backed securities.

Deutsche Bank’s Cryan had always insisted the German lender would pay far less than the initial US demand. And the bank brushed off fears the consumer relief element would significantly hit its results.

“The financial consequences, if any, of the consumer relief are subject to the final terms of the settlement, and are not currently expected to have a material impact on 2016 financial results,” the bank said.

Finance


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend