Another expensive deal for Credit Suisse (CS). CS is reducing legacy assets in the US with a one-time payment. He said Monday he has reached a settlement with the New Jersey Attorney’s Office regarding residential mortgage-backed securities (RMBS).
RMBS are mortgage-backed securities transactions in the American real estate market. It relates to transactions completed by CS prior to the 2008 financial crisis.
Initially, 3 billion was required
As part of the deal, CS is making a one-time payment of $495 million. Almost ten years ago, the authority had claimed more than 3 billion in damages. Payment is fully covered by provisions, assures CS.
According to CS, the deal is an important step forward. Because this is the only remaining RMBS issue where a US regulator has made claims. These were also the highest remaining requests of this type.
Investors lost a lot of money
RMBS transactions are thought to have triggered the 2008 financial crisis. Many large banks have been accused of misleading their customers when selling such “junk mortgages.” When the real estate market crashed, investors in RMBS securities lost a lot of money.
In recent years, there have been several proceedings in connection with the RMBS. For example, CS just reached a benchmark in April 2021. As part of that, it has already paid $500 million. At the beginning of 2021, the provisions regarding such transactions were increased. (SDA/shq)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
