US Penalizes Credit Suisse, Deutsche Bank $12 Billion For Toxic Debt

ZURICH/FRANKFURT Credit Suisse and Deutsche Bank have been hit with a combined penalty of more than $12 billion over the sale of U.S. toxic debt, further hampering two of Europe’s leading investment banks as they grapple with falling profits. The penalty puts them at a further disadvantage to larger U.S. rivals. Credit Suisse (CSGN.S) agreed in principle to pay U.S. authorities $2.48 billion to settle claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis, the Swiss bank said on Friday. Credit Suisse will also provide $2.8 billion from the settlement over five years to offset the impact on consumers, it said […]

Credit Suisse agrees $5.3 billion U.S. mortgage settlement

ZURICH Credit Suisse (CSGN.S) had agreed in principle to pay US authorities $2.48 billion to settle claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis, the Swiss bank said on Friday. Credit Suisse will also provide $2.8 billion in consumer relief over five years from the settlement, it said in a statement, adding the deal was subject to negotiation of final documentation and approval by its board of directors. “Credit Suisse will take a pre-tax charge of approximately $2 billion in addition to its existing reserves against these matters. This will be taken in our 4Q 2016 financial results,” it added. […]

Deutsche Bank agrees to $7.2 billion mortgage settlement with U.S.

NEW YORK/FRANKFURT Deutsche Bank has agreed to a $7.2 billion settlement with the U.S. Department of Justice over its sale and pooling of toxic mortgage securities in the run-up to the 2008 financial crisis. The agreement in principle, announced by Deutsche Bank’s Frankfurt headquarters early Friday morning, offers some relief to the German lender, whose stock was hit hard in September after it acknowledged the Justice Department had been seeking nearly twice as much. It also highlights the Justice Department’s recent efforts to hold European banks accountable for shoddy securities that contributed to the U.S. housing market collapse. The department sued Barclays PLC on Thursday over similar claims, after having […]

Volkswagen reaches deal with 80,000 U.S. 3.0-liter vehicle owners

WASHINGTON A federal judge said on Thursday that Volkswagen AG (VOWG_p.DE) has reached an agreement in principle to provide “substantial compensation” to the owners of about 80,000 3.0-liter polluting diesel vehicles, a key hurdle to resolve the German automaker’s emissions scandal. U.S. District Judge Charles Breyer did not disclose the amount of owner compensation, which is not included in a $1 billion settlement announced earlier this week between VW and U.S. regulators. Half of the compensation will be paid at the time Breyer gives final approval of the settlement. Some fixes for the 3.0 liters may not approved until 2018, Breyer said. Earlier this week, Volkswagen reached the $1 billion […]

U.S. sues Barclays, ex-executives for mortgage securities fraud

NEW YORK The U.S. Department of Justice on Thursday sued Barclays Plc (BARC.L) and two former executives on civil charges of fraud in the sale of mortgage-backed securities during the run-up to the 2008-09 financial crisis. The lawsuit was filed after Barclays resisted a penalty the U.S. government had sought in settlement negotiations, a person familiar with the matter said. The person would not disclose the government’s demand. Major U.S. banks, including JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N), have paid tens of millions of dollars to settle similar claims over misconduct in the sale and pooling of mortgage securities, which helped to cause the financial […]

Services bring new opportunities for banks

As the dollar value of global merchandise reduces, the value of cross-border services is rising, creating new opportunities for banks to innovative by embracing the change. In an analysis of bilateral trade between 25 key trading nations, Global Trade Forecast, HSBC and research partner Oxford Economics found that growth in services exports has outstripped growth in goods trade since the global financial crisis. Services’ share of total world trade rose from 20% in 2011 to 23% in 2015, with outsourcing of intermediate business services to specialized suppliers driving much of this growth. In 2016, the dollar value of goods is expected to contract by about 3%, while cross-border sales of […]

How Do Banks Use Your Money? Morgan Stanley Fined $7.5M For Mishandling Depositors’ Funds

Morgan Stanley faces a $7.5 million fine from the Securities and Exchange Commission, the SEC announced Tuesday, for using illegal levels of customers’ cash and securities in swap trading. From March 2013 to May 2015, the megabank used its affiliate, Morgan Stanley Equity Financing Ltd., to serve as a client to its U.S. securities brokerage, the SEC said. In doing so, the affiliate could use funds from the brokerage, or broker-dealer, to finance its trades. The only problem: The broker-dealer’s customer deposit reserves are required to be maintained at a certain level, in case customers want to pull out their money — in, say, the case of bank failure — and […]

Immigrants In Europe 2016: Swedish Police Hire Immigrants Amid Growing Ethnic Diversity In The Country

The police force in Sweden wants hire a greater number of immigrants to adjust to the increasingly diverse population in the country. Law enforcement authorities are optimistic Swedes seeing more immigrants in police uniforms will give the force new “street cred.” The initiative called the World Integrated into Swedish Police Project aims to increase ethnic diversity in every level of law enforcement. “We need a lot more diversity in the police, applying to everything from ethnicity to different experiences and backgrounds,” Carin Götblad, who leads the World Integrated into Swedish Police project, said in a press release. Only 6 percent of Swedish police officers had an immigrant background as of Tuesday, compared to 17 percent of […]

Exclusive: U.S. proposed $5 billion – 7 billion penalty on Credit Suisse on toxic debt – source

ZURICH/NEW YORK The U.S. Department of Justice has asked Credit Suisse to pay between $5 billion and $7 billion to settle a probe over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis, a source with knowledge of the matter said, but the bank has resisted settling for that amount. The size of the suggested settlement indicates that the cost to the bank may be higher than analysts had expected and explains why Credit Suisse management, according to a second source, has been seeking a smaller penalty. “Credit Suisse is confident of reaching a better solution,” said the second person. Should talks break down, U.S. legal […]

Climate Change: Global Alliance To Fight Ocean Acidification Formed

Carbon emissions have a clear impact on Earth’s atmosphere, trapping heat and contributing to global warming, which is one of the various facets of climate change. However, a lot of that carbon also gets absorbed by the water bodies on Earth, especially the oceans, where it contributes to increasing the acidic component of their waters. Oceans cover 70 percent of our planet, and seawater is actually basic, not acidic, but as an estimated 30-40 percent of carbon dioxide released into the atmosphere due to human activity is dissolved in the oceans, the basicity of seawater reduces and moves toward being pH-neutral, like pure water. That process is referred to as […]

Climate Change: Arctic Report Card Shows Global Air Conditioner Is Failing

The Arctic got its report card Tuesday and it looks like someone is due for detention. It showed the Arctic is in failing health with temperatures at their highest since recordkeeping started more than a century ago, leading to a decline in snowpack and sea ice, ocean acidification and other environmental ills. “What happens in the Arctic doesn’t stay in the Arctic,” said Jeremy Mathis, director of NOAA’s Arctic research program. The lack of ice and snow could affect jet stream patterns across the Northern Hemisphere, leading to weird weather patterns. Our global air conditioner appears to be breaking down. An addendum to the annual assessment, which usually just covers […]

G20 trade agenda welcomed by industry leaders

A pro-trade agenda set out by G20 leaders after their Hangzhou Summit in China has been welcomed by leading trade figures. While there were few concrete details revealed in the official communique, the world’s 20 most powerful nations aligned to slam protectionism, to call for inclusive growth and to use innovation to spur trade growth, as opposed to a fiscal stimulus. Furthermore, China agreed to work with its trading partners to arrest volatility in the steel sector, where China’s oversupply has flooded global markets and led to accusations over dumping, bringing a number of lawsuits to the WTO. Calling for a global forum on steel at the OECD, the statement, […]

Theresa May Pushes For New Trade Relations At G-20 Summit Post Brexit

Following Britain’s decision to leave the European Union, Prime Minister Theresa said Sunday that she intends to seize new trading opportunities for the post-Brexit Britain. During the ongoing Group of 20 summit in Hangzhou, China, May met U.S. President Barack Obama where both leaders reaffirmed that the “special relationship” between the U.S. and U.K. would not be affected by Britain’s decision to leave the EU. However, Obama maintained that the U.K. would have to wait for fresh negotiations for trade relations between the two countries as the U.S.’s current focus was to finish trade deals with Asia-Pacific and the European Union. Meanwhile, he said Britain was “figuring out what Brexit means […]