Relief for European banks..
Lower US Deutsche fine ‘bodes well’ for RBS
The German bank agreed a $7.2bn (£5.9bn) settlement with US authorities over an investigation into mortgage-backed securities, instead of the $14bn (£11bn) the US had asked the bank to pay in September.
Credit Suisse has also agreed in principle to pay US authorities $2.48 billion to settle claims, the Swiss bank announced this morning. This is in line with the $5bn-$7bn the US Department of Justice had asked it to pay earlier in negotiations.
RBS and Barclays remain under investigation by the US authorities. RBS sees the imminent US penalty as one of the biggest barriers to its recovery.
Hargreaves Lansdown analyst Laith Khalaf said: “The £11billion number for Deutsche that came out earlier in the year was a bit of a shock and probably worsened expectations around the RBS fine. If they’re getting a reduction, then it’s good news for RBS.”
The settlement came after RBS and Barclays were among seven banks fined £78 million by the Swiss Competition Commission over interest rate rigging.
The offences emerged from the 2008 banking crisis.
JP Morgan Chase & Co, Citigroup, Deutsche Bank, Societe Generale and Credit Suisse were the others penalised.
Italy’s cabinet has approved a state-bailout for the country’s third-largest bank, Monte dei Paschi di Siena.
Prime Minister Paolo Gentiloni said his government had authorised a €20bn ($21bn, £17.9bn) fund to support Italy’s embattled banking sector.
The announcement came after Monte dei Paschi had failed to raise €5bn from private investors.
Italy’s banking system is being dragged down by about €360bn of bad loans.