RBS agrees to US$4.9 billion fine in US: Report
FILE PHOTO: Morning commuters walk past a branch of the Royal Bank of Scotland (RBS) in London, Britain, November 4, 2011. REUTERS/Andrew Winning/File Photo
NEW YORK: The Royal Bank of Scotland has agreed to pay US regulators US$4.9 billion in fines to settle litigation over subprime mortgage products it sold before the 2008 financial meltown, the Financial Times reported Thursday (May 10).
The US attorney's Office in Massachusetts, which oversaw talks with the bank, would not confirm the amount.
But it said in a tweet that it had reached an agreement in principle with RBS and some of its affiliates "to settle potential civil claims to RBS's structuring and sale of residential mortgage-backed securities issued b/w 2005 & 2008".
Other details were still being worked out before a final settlement could be announced, according to the prosecutors
This was the last in a series of lawsuits brought against RBS by the US Justice Department.
RBS, once the world's largest bank, had to be rescued by British government during the global financial crisis.
Like other banks, RBS packaged toxic subprime mortgages into risky financial derivatives and sold them to customers, a practice that helped trigger the 2008 housing meltdown.
RBS had already set aside a huge pot of money for fines linked to its behavior leading up to the crisis.
The British government, which ended up owning 71 per cent of RBS, will now more easily proceed with the bank's privatisation.
RBS had already been fined several times by other US government agencies because of its sales of subprime-based financial products.
Source : http://www.channelnewsasia.com/news/world/rbs-agrees-to-us-4-9-billion-fine-in-us-report-10222054