Credit Suisse said that it had agreed to pay $5.3 billion to settle an investigation by the United States authorities into the packaging and sale of mortgages ahead of the global financial crisis eight years ago, the New York Times reported today. The announcement came a day after the Justice Department sued Barclays over the sale of toxic mortgage securities and Deutsche Bank separately said it had reached a tentative $7.2 billion deal to resolve an investigation into its sale of securities backed by residential mortgages. Credit Suisse said that it would pay a civil penalty of $2.48 billion and provide unspecified relief to American consumers valued at $2.8 billion over five years. The settlement is subject to final negotiations and board approval, according to the bank. The agreement would resolve claims that Credit Suisse, like many other financial institutions at the time, bundled together unsuitable mortgages into securities that contributed to the 2008 financial crisis when the American housing market collapsed.
