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12 July 2017
Royal Bank of Scotland said Wednesday it has reached a $5.5 billion
settlement in the United States over mortgage-backed securities issued before
the financial crisis.
The deal with the Federal Housing Finance Agency — the conservator of
Fannie Mae and Freddie Mac — resolves claims regarding the issuance and
underwriting of approximately $32 billion (25 billion pounds) of residential
mortgage-backed securities. The Total
Investment & Insurance Solutions
RBS CEO Ross McEwan says the announcement is "an important step
forward in resolving one of the most significant legacy matters facing
RBS." The Total Investment &
Insurance Solutions
McEwan has been at pains in recent months to insist RBS has put its
legacy issues behind it. The bank was bailed out at the height of the financial
crisis and is now owned by the British taxpayer.
"This settlement is a stark reminder of what happened to this bank
before the financial crisis, and the heavy price paid for its pursuit of global
ambitions," McEwan said.
Under the settlement, RBS will pay $5.5 billion, but be reimbursed for
$754 million under indemnification agreements with third parties. The Total Investment & Insurance
Solutions
The cost is largely covered by money it had already set aside. It will
take an extra charge of $196 million.The
Total Investment & Insurance Solutions
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