The Daily Express reports that US regulators are thought to be targeting a number of banks, including State-backed RBS and Barclays, for selling toxic bonds or investments backed by US mortgages, including sub-prime loans, to investors.
According to analysis prepared for the board of one large Wall Street bank, RBS could have to pay between $4bn and $10bn, based on previous settlements.
In November JPMorgan paid $13bn to settle all mortgage bonds litigation with the US government. The analysis claims that the banks collectively may have to pay $50bn to US authorities to settle claims arising from the sale of the disastrous investments.
The sale and proliferation of US mortgage-backed securities is widely acknowledged as a cause of the credit crunch.
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image: © Elliot Brown