US finalises US$4.9b fine on RBS for financial crisis conduct
Royal Bank of Scotland signs are seen at a branch of the bank, in London. (REUTERS/Peter Nicholls/File Photo)
NEW YORK: Britain's Royal Bank of Scotland will pay US$4.9 billion to settle charges it misled investors on mortgage-backed securities ahead of the financial crisis, the US Justice Department announced on Tuesday (Aug 14).Edinburgh-based RBS committed a variety of ills associated with the underwriting and packaging of sub-prime loans into securities that became toxic in the US housing bust, US officials said.
"Many Americans suffered lasting economic harm as a result of the 2008 financial crisis," said Acting Associate Attorney General Jesse Panuccio."This settlement holds RBS accountable for serious misconduct that contributed to that financial crisis, and it sends an important message that the Department of Justice will pursue financial institutions that illicitly harm the American economy and our consumers."A final settlement was expected after RBS in May disclosed a preliminary deal with the Justice Department.A Justice Department statement accused RBS of failing to disclose loan risks to investors; waiving standards in a way that allowed bad loans to be included in securities packages; and providing loan data to investors that gave a false impression that the loans were less risky than they really were.
These offences are "allegations only, which RBS disputes and does not admit," the Justice Department said.Last year, in a settlement with the Federal Housing Finance Authority over the same matter, the bank agreed to pay US$5.5 billion.The fine is the latest following billions of dollars in penalties on major banks over their conduct ahead of the financial crisis.
Source : https://www.channelnewsasia.com/news/business/us-finalises-us-4-9b-fine-on-rbs-for-financial-crisis-conduct-10617944